Gold stocks is known as perhaps the No. 1 "safe haven" in harsh economic times. Between mid-2007 and 2009, gold prices went from $940 an ounce to nearly $1,220 an ounce. That's more than a 33% gain at a time when equity prices, real estate prices and the value of the greenback were in a freefall.
That alone is reason enough to make investors want to add gold stocks to their portfolio... And they have.
In 2009, investors bought a total of 573 tonnes of gold through exchange-traded funds. That's 20.2 million ounces, and at the average price per ounce in 2009, that's an investment of $19.6 billion!
But with the strength of the dollar rising in the wake of the euro's near collapse, and the still-green shoots of recovery pushing up into the sun, individual investors might need more than one reason to keep or add gold stocks to their portfolios.
Indeed, here are five...
Read more and comment ...Happy Friday the 13th. An inauspicious type of day, if you believe in that sort of thing. (Better not to, of course. They say it's bad luck to be superstitious.)
Ben Bernanke certainly had his share of bad luck this week. The carefully planned actions of the Federal Reserve - calibrated just so to walk that fine line between too accommodative and not enough - were thrown into a cocked hat by a barrage of ugly data points from around the world.
China slowing. Britain slowing. New sovereign debt jitters from Ireland. Japan sinking back into the muck. Perhaps worst of all, a U.S. trade deficit that clearly shows the "recovery" spinning its wheels.
What will the Federal Reserve do now? Should Bernanke and Co. react swiftly to the latest thumbs-down by Wall Street, or would that look like pandering? Has the timetable for full-blown "QE2" - shorthand for quantitative easing II, though it sounds rather like the name of a cruise ship - been sped up? Only the shadow knows.
Read more and comment ...Lighter than air, the Hindenburg floated to its destiny over the Lakehurst Naval Air Station.
In virtually an instant, the picture that has since been burned into everyone’s brain began to unfold...
Suddenly bursting into flames, the great ship was completely destroyed.
And ever since that fateful day, the mere mention of the Hindenburg has carried with it a certain sense of the ominous, portending disaster.
That’s why, when I came across a reference to an obscure technical pattern known as The Hindenburg Omen on the blog Zero Hedge, my interest was piqued.
To top it off, I stumbled upon this particular article on Friday the 13th...
Read more and comment ...Diane Cunningham of Colorado Springs, Colo., no longer has a flat-screen television. She decided to sell it... so she could buy a shotgun.
Colorado Springs shut off a third of its streetlights this past winter, The New York Times reports, in order to save $12 million on electricity. Shortly thereafter, a chain of events convinced Ms. Cunningham she needed to be armed.
"Her tires were slashed, she said. Her car was broken into. Strange men showed up on her porch. Her neighborhood had grown deserted at night..."
Meanwhile, in East St. Louis, Mo., Reverend Joseph Tracy is convinced guns are the problem. (Guns in the hands of criminals, that is.)
Read more and comment ...The Dow was flat yesterday. Gold rose $9 to $1,226.
Has the dip in gold already come and gone?
We were expecting lower stock prices...and lower gold prices too. Both went down earlier in the summer. But neither went down as much as we expected...nor stayed down.
But it's still fairly early in this correction. The recession began at the end of '07. We're now approaching the last quarter of '10.
By this time in the '30s, top stocks were hitting rock bottom. The market crashed in the autumn of '29...then bounced...and then started down again. It didn't stop until it hit bottom in July of '32 - nearly three years later. By then, top stocks had lost nearly 90% of their value, from 381down to 41.
It can take longer, however. Japanese stocks crashed in '90. But they didn't hit their ultimate bottom until 2008 - 18 years later - with losses of about 90%.
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