2 years ago, I was not persuaded by those analyst who kept saying GOLD is an inflation hedge hence we should invest in Gold. Many people i know did "invest" in Gold and lost quite a bit in the recent pullback. I cannot stress this enough, Gold and other commodities are not investments, you can however take advantage of the situation and trade it. An investment should give you capital gains and/or dividends.
I treat all commodities as a tool for trading and so should you. Do not be under the impression that you can hold onto Gold forever, if you do, be prepared to face huge price swings in the future. This does not mean i believe Gold will collapse, it might keep on rising as some hardcore fanatics predict Gold might even hit $5,000 or $10,000. Please be reminded that along the way, Gold price might go below $1000.
In earlier posts, i have talked about Market Cycle. We are in the middle of another cycle, the commodities cycle where inflation is higher than usual, commodity prices keep rising. In fact Jim Rogers is correct in saying that there will be a shortage in commodities in the near future. If and unless we stop innovating new methods of food production, mineral mining, ore extraction and purification, commodities will rise non-stop. History has taught us that is not the case, look at the chart below:
We have been riding one of the steepest commodities BOOM in history. From the chart is seems we are nearing the end, i.e if technicals are followed (trades within the widening aplitude channel). Its not far away now, 2014-2015 is going to be recorded in history to be the worst fall in commodities ever.(just watch and see)
Again my opinion here is that commodities should be traded, it shoud not be treated the same as a business which you can invest in, with the intention of "buy and hold".
Disclaimer: I am not here to discourage you from investing in commodities neither am i encouraging you to do it. Please be cautious about investing your hard earned money.
I treat all commodities as a tool for trading and so should you. Do not be under the impression that you can hold onto Gold forever, if you do, be prepared to face huge price swings in the future. This does not mean i believe Gold will collapse, it might keep on rising as some hardcore fanatics predict Gold might even hit $5,000 or $10,000. Please be reminded that along the way, Gold price might go below $1000.
In earlier posts, i have talked about Market Cycle. We are in the middle of another cycle, the commodities cycle where inflation is higher than usual, commodity prices keep rising. In fact Jim Rogers is correct in saying that there will be a shortage in commodities in the near future. If and unless we stop innovating new methods of food production, mineral mining, ore extraction and purification, commodities will rise non-stop. History has taught us that is not the case, look at the chart below:
We have been riding one of the steepest commodities BOOM in history. From the chart is seems we are nearing the end, i.e if technicals are followed (trades within the widening aplitude channel). Its not far away now, 2014-2015 is going to be recorded in history to be the worst fall in commodities ever.(just watch and see)
Again my opinion here is that commodities should be traded, it shoud not be treated the same as a business which you can invest in, with the intention of "buy and hold".
Disclaimer: I am not here to discourage you from investing in commodities neither am i encouraging you to do it. Please be cautious about investing your hard earned money.
No comments:
Post a Comment