History has proven that 100% of fiat currencies have failed the test of time. The average life span of a fiat currency is 40-50 years. With the US dollar now in it’s 44th year it makes you wonder if the end of the greenback is near.
The only money that has held the test of time has been asset-backed currencies using gold. Or through owning gold and silver bullion.
But without getting into the details to save us all time let’s take a quick look at what gold and silver are doing.
Both gold and silver have been dropping in value for 4 years with investors keeping their eye and capital tied up in the equities market. QE1, QE2, Operation Twist, and QE3 have helped to take investors capital out of metals and into equities (US Dollar-based investments) and will be left holding the bag when the dollar is devalued and stocks plummet 70% or more.
The manipulation in gold and silver pricing the past few years which continues to drag prices lower to this day gives the sinking feeling of hopelessness for investors of physical metals scaring them out of the market. The reality of it in my opinion is that this is the great buying opportunity in our lifetime before the global economic crash.
These hard assets being gold and silver will likely be used as the asset to back the coming world currency, after the global economic crash. The ensuing worldwide chaos it could cause when currencies fail, trade fails, and people struggle for quality food is something I hope is avoided.
While I do not think there is not enough gold to support a currency maybe silver will be the next asset to back a currency?
Something big is going to be happening with silver I feel. After a 16 month period of “dormancy” from the silver giant JP Morgan have returned with a vengeance to take delivery of record amounts of physical silver in the Comex vaults yet again.
In the first two weeks, April of 2015 alone JP Morgan purchased a whopping 8,300,000 ounces of silver.
JP Morgan currently holds over 55,690,000 ounces of silver and that number continues to grow.
What does this mean? No one knows for sure, but my guess it’s going to support something new, big and important down the road and I think riding their coat tails it not a bad idea.
https://thegoldandoilguy.com/wp-content/uploads/2015/05/greenback.jpg211239adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-05-20 19:24:382015-05-19 17:52:55New World Currency Backed By Gold or Silver?
Over the years, hundreds of various self-proclaimed prognosticators who said a global economic collapse were to happen on this date or that date have failed. Sort of like the old story about the shepherd who cried wolf.
Unfortunately this is EXACTLY what looks to be getting ready to happen. But first let me mention that the most accurate doomsday/sky is falling talking heads out there who have predicted several life changing events correctly in the past always seem to be 3-5 years early.
Why are these people always a few years early in predicting these events?
I believe it is because they focus almost strictly on fundamentals and economic data and ignore price analysis of various assets which could help in timing these events. There is no doubt in my mind they are correct about the fundamentals being out of whack and unsustainable, but I know from trading that fundamental data can lead or lag the actual markets themselves by several years.
In 2011 and 2012 several global economic collapse scenarios started to float around the market place. Now 4-5 year later we have yet to have a global collapse. But, what is interesting is the fact that many of the things they said would start to happen HAVE started happening in the past few months.
What scares me the most is the fact that the US bond bubble may burst, the USA will not be able to service their debt, the dollar will collapse in value, and a new currency will emerge.
If this happens everyone will experience some rough times for a while. Keep in mind that most of the US dollars are held outside the United States. The dollar is global and will send a shockwave into several countries financial systems.
Secret New Global Economic Treaty
Barack Obama has been working secretly on a new treaty and potentially new world currency. Only members of Congress are allowed to look at the treaty and they are being banned from saying anything to the public.
Americans could lose most of their wealth overnight and thanks to all of this secrecy they won’t even see it coming. There is the potential for a massive devaluation in the dollar which could happen literally overnight. This means Americans (individuals holding primarily US Dollars) will wake up one morning with a fraction of the wealth they had 24 hours ago. Its scary stuff to say the least.
This new treaty is the “Trans-Pacific Partnership”, and is being touted as perhaps the most important trade agreement in history. Very few people in this country are talking about it.
Currently, there are 12 countries in negotiations: the United States, Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. These countries have a total population of 790 million people which accounts for an astounding 40 percent of the global economy. If the EU, China, and India join then this treaty will likely pass.
Join TheGoldAndOilGuy Trading Newsletter today and be prepared and profit from uncertain times!
I buy my silver & gold at SDBullion.com
They ship to USA, Canada & more…
https://thegoldandoilguy.com/wp-content/uploads/2015/05/secret.jpg225225adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-05-13 14:31:072015-05-14 12:24:30Prognosticators Who Cried Wolf about Dollar & Global Economic Collapse – Part 1
It’s the news everyone dreads—a call from the hospital. And it’s about one of the most important people in the world…
Your mother.
[Every ALL-CAPS ITEM below contains silver or is required in its use.]
You hear the nurse talking urgently through your TELEPHONE and you realize it’s serious…
You grab your REMOTE CONTROL and turn down the volume on your PLASMA TV that’s playing your favorite DVD movie. You push the BUTTON and the SPEAKERS go mute. You press “save” on the KEYBOARD of your COMPUTER.
“Yes, she’s okay,” the nurse tells you. “But you need to come to the HOSPITAL right away.”
That’s all you need to hear. You yell to your spouse and grab your CELLPHONE to call your siblings.
“Is she alright?” your wife asks frantically. She was using the VACUUM CLEANER and WASHING MACHINE and didn’t hear the conversation.
“Yes, but hurry,” you reply, reaching to turn off the STOVE.
Your wife springs into action—she pushes the TOYS out of the way, grabs a WATER BOTTLE from the REFRIGERATOR and closes the MICROWAVE door.
You run to the bedroom and put on that new SUNBLOCK SHIRT she got you and check yourself in the MIRROR. You notice the glint off your SOLAR PANELS shines brightly through the WINDOW. You’re sweating and are glad the AIR CONDITIONER and AIR PURIFIER are working.
Your wife opens the LATCH to the front door. You notice she’s wearing those EARRINGS you got her for Christmas, the ones you put in with the CD of her favorite singer.
You unlock the car with your REMOTE KEY and rev up the ENGINE. Your wife opens the POWER WINDOWS while you adjust the POWER SEATS.
You leave the RADIO off, and are impatient at the STOPLIGHT, even though you can already see the CELLPHONE TOWERS on top of the hospital. Your wife is talking to your other family members on her CELLPHONE.
You pull up to the toll booth and the SCANNER beeps you through quickly. Your wife glances at her WATCH, and you remember she needs a new BATTERY.
You enter the hospital through the AUTOMATIC DOOR and a receptionist uses an IPAD to give you the room number. The indoor temperature is cool and you remember reading about the new INSULATION the hospital used in construction. You quickly push the ELEVATOR BUTTON for the second floor.
You reach the room and there is your mother, lying on a RECLINING BED, with a BREATHING TUBE in her mouth. She’s connected to NUMEROUS HOSPITAL DEVICES, some of which display readouts on a COMPUTER SCREEN. You try not to panic, as you see various SURGICAL INSTRUMENTS lying on a nearby SILVER tray.
“Your mother is on MEDICATION,” says a doctor walking into the room. He has a STETHOSCOPE around his neck and EYEGLASSES perched on his nose.
“She fell and sustained some injuries, but she will be okay.” You see the BANDAGES on her face and arms, and the doctor notices your concern.
“We’ll take some X-RAYS to be sure she didn’t break any bones,” he says. “And she’s already on ANTIBIOTICS, so we’ll catch any infection before it starts.”
You take a deep breath of relief as you realize she’ll be okay. You grasp your mother’s arm and notice she’s still wearing her favorite BRACELET.
The doctor uses a LAPTOP to update her status. The nurse uses a WATER PURIFIER to fill the water pitcher and sets it on the ANTI-SCRATCH surface of the nearby table.
You settle into a PLASTIC CHAIR beside your mother and take a deep, relaxing breath. It then dawns on you just how much…
Silver Is Essential to Modern Life
There are numerous medical examples like this every day, where silver served a cornerstone purpose to treat a hospital patient. In fact, if you’ve ever been treated by a doctor or admitted to a hospital, you’ve been a direct recipient of one or more of the medical benefits of silver. From simple bandages to life-saving equipment in operating rooms, silver is quite literally a lifesaving precious metal.
Silver is used in nearly every major industry today, from biocides and electronics to solar panels and batteries. In fact, silver is so embedded in modern life that you do not go one day without using a product made with or by silver. It’s everywhere, even if you don’t see it.
Due to the exponential increase in the number of uses for this precious metal, demand has exploded. Check out silver’s growth…
Jewelry and silverware use is up 27.2% since 2011.
India imported 5,500 tonnes of silver last year, 180% more than just two years ago.
Solar power accounted for 29% of added electricity capacity in America last year. “Eventually solar will become so large that there will be consequences everywhere,” says the US Solar Energy Industries Association.
China’s solar industry is exploding—it represented about 0.2% of the global market in 2009, but last year soared to 17%.
Silver demand in China exceeded a quarter million ounces last year for the first time in history.
New uses for silver continue to be discovered. The latest fashion—a “scough”—uses silver nanoparticles to trap and kill germs and pollutants.
Total industrial demand is projected to increase 5% per year through 2016—and outpace global GDP growth.
In spite of the fall in price, ETF demand soared in 2014, as total holdings exceeded the 2011 record high.
Demand is relentless.
But Here’s the Best Part…
If you’re an investor, the price of silver is poised for a massive rebound, after one of the most severe bear markets in history. Silver has declined three consecutive years—and hasn’t fallen four straight years since 1991. The price is so undervalued that adjusted for inflation, $17 silver is equivalent to about $4 in the year 2000!
In fact, silver is currently trading below its price before the financial crisis struck in 2008, and before the first QE program was introduced. It’s basically trading as if no money has been printed!
There is a clear disconnect between this precious metal and its price.
And that is our opportunity. The silver price has overreacted so dramatically to the downside that it is one of the most compelling investments today. In fact, it’s hard to find a more distorted market full of opportunity.
While hopefully you won’t need silver to save your life anytime soon, we’re convinced it will be a portfolio-saving investment in the very near future.
Just like gold, a stash of silver bullion will help us maintain our standard of living. In fact, silver may be more practical to use for small purchases, as there will be times you may not want to sell a full ounce of gold. And in a high-inflation/decaying-dollar scenario, the silver price is likely to exceed consumer price inflation, giving us further purchasing power protection.
The bottom line is that silver is quite possibly the buying opportunity of this decade. The next few years could be very exciting. And if you like bargains, silver’s neon “Sale!” sign is flashing like a disco ball.
To take advantage of this potentially life-changing setup, we have a special offer in the just-released issue of BIG GOLD…
All investors should own a stash of sovereign bullion coins—Eagles, Maple Leafs, Philharmonics, etc. They’re the most recognizable around the world and the most liquid, an important trait when it comes time to sell.
However, we’ve identified a potentially lucrative trend in the silver market, where we can buy bullion coins with numismatic potential. In other words, these coins could increase in value muchmore than standard bullion coins. Even many veteran silver investors have not caught on to this trend.
How do we know these coins have numismatic upside? Because it’s already happened with similar coins. In fact, a similar coin from 2011 is now selling for near a 100% premium. And this occurred while precious metals were in a bear market!
Right now, you can buy this coin for roughly the same premium as a silver Eagle. In other words, there is essentially no risk to buying these coins—if for some reason they never accrue any numismatic value, they’ll still always sell for at least the price of bullion since they contain a full ounce.
And here’s the best part: our recommended dealer has discounted these coins exclusively for BIG GOLD readers. The price is lower than you’ll find anywhere else in the bullion market, handing us even further savings. We also include a similar discount on a gold coin with numismatic potential.
There’s much more to our May issue… We detail why we think the next bull market in gold could kick into high gear very soon (it’s in Jeff Clark’s introduction). It’s a development most mainstream investors are completely overlooking—which is our opportunity, because they’ll be surprised by this event and rush into the precious metals market literally overnight. If we’re right, it could light a fire under the gold price.
But you need to invest now, before it takes place, and while the discounted premium on these coins is still available. Either way, don’t let the current bear market fool you—it’s stretched to an extreme and will shift into a new bull market soon. Markets cycle, as history has repeatedly shown, and this market is due for its next upcycle.
Test-drive BIG GOLD at no risk, with a 3-month, money-back guarantee. It comes with the discount on the two bullion products that have numismatic potential, plus all our current stock recommendations, including tables that show the prices they’d hit if they matched past bull markets. The potential gains are enormous—and a tremendous opportunity if you don’t own precious metals stocks.
If you don’t like it, cancel. But we think you’ll find tremendous value for the low price.
I buy my silver & gold at SDBullion.com
They ship to USA, Canada & more…
https://thegoldandoilguy.com/wp-content/uploads/2015/05/silver.jpg225224adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-05-11 15:46:202015-05-14 12:06:02Buy Silver or You Will Die!
The SP500 index (US Stock Market) continues to be in and Uptrend.
The major trend line on the chart below must be broken in a big way before a full blown bear market will be confirmed. This is still months away at best so do not worry. The AlgoTrades INNER-Market Analysis will get us positioned when the time is right and enable us to profit as the stock market falls in value.
Your long term equity investments can continue to be held at this point. Speculative and momentum stocks (Russell 2K index) continue to show weakness, so I would stay away from them. Large cap stocks will likely be in favor as the safe haven “blue chip” stocks, but when the market is ready to roll over, all stocks will fall. The safe haven plays should be bonds, gold, and inverse ETF funds.
We do fear a US dollar currency crisis, and if so investors will be moving away from US investments and the massive bond bubble may burst. But at this time, it is not a concern.
This chart I feel provides a great perspective on the overall market trend and price patterns. This is the 70 year prospective. I hope something like this unfolds. Fingers crossed to a 12 month correction/bear market. This will build the new base for the next super cycle.
US Dollar has now reached the upper resistance trend line… we could see weakness in the dollar going forward…
The Risk-Off Trade Is Slowly Unfolding
The S&P 500 index is losing its momentum. Money has been rotating into Bonds and global markets for a year in anticipation of the stock market correcting.
With six months of the SP500 index trading sideways we have had to focus on some other areas to find opportunities. Some recent winners have been long oil with UCO, long live cattle with COW, long Russia via RSX, and long Japan with EWJ. Those who follow my ETF trade alerts newsletter have avoided the recent chatter in the SP500. We have be doing even better with our active stock trades.
The Fear Index & Big Trend Analysis
The VIX index has been trading at low levels for a few years. This suggests that fear is low, complacency is high, and that SP500 is becoming vulnerable to a stock market correction.
In the chart below, I have placed the VIX index above the stocks trading above the 200 day moving average. As the number of stocks trading above the 200 day moving average falls it’s telling us that fewer stocks are moving up in value while the broad market climbs. This is bearish.
This provides a great visual of how falling markets correlate with investor fears. While overall market breadth remains strong, a change in the VIX often provides an early warning sign of potential danger.
“When The VIX Is Low Its Time to Go, When The VIX Is High Its Time To Buy”
Stock Market Rises with Fewer Stocks – RED FLAG
Since mid 2014 the US stock market has become move volatile. Fewer stocks participating in the markets move up. This can be seen by comparing the percent of stocks trading above their 200 day moving average and the S&P 500 index.
When a stock market stalls, which is what it appears to be doing, the movement is comparable to that of how an aircraft stalls. It slowly continues to rise, things become choppy/unstable, then it drops and picks up speed trying to regain stability and control.
Once the stock market or an aircraft come to a complete stall they both end with a violent drop. While I am not calling a top yet, understand each month we are getting closer.
An analyst and trader I respect talked about how the Dow Jones is flat for the the year, yet investors think big profits are bing made. But in reality we have not seen real gains and the broad market expand in months. More investors are bullish now than we have almost ever seen according to Investors Intelligence Survey with a whopping 57% of investors bullish on stocks.
The CEO of Ameritrade said that almost all of their 6 million traders/investor account are completely invested in stocks, and are leveraged using margin also. This is the ultimate contrarian warning sign of a bear market should begin over the next few months.
INNER-Investor Monthly Conclusion:
The great thing about being an investor is that the analysis and trends move relatively slow. We do not buy at the dead low, nor do we exit at the high, and sometimes we get shaken up during tough phases in the market like the second half of 2014 and first half of 2015.
I’ll be honest, the second half of 2014 and first portion of 2015 has been exceptionally tough to generate profits.
Winning streaks, and losing streaks are just part of investing and it happens to everyone and every strategy as the market has difference market phases and characteristics.
I believe the second half 2015 is will provide great opportunities and we will close the year out with decent gains.
Each year traders try to navigate their way through the financial market and turn a profit. But this is difficult.
The stock market provides market participants with several opportunities each. With all the holidays and climate changes the market as a whole along with specific sectors typically have seasonal rallies and sell off in price.
As May approaches many of us are starting to figure out how to play the “Sell in May and Go Away” potential move.
I cannot help think stocks will start to struggle as indexes test new highs and key resistance levels. The good news is that when money is flowing out of one investment it typically flows into another which provides us with an opportunity to make money.
Risk capital has been flowing into stocks recently but with the stock market over bought on a short term basis traders will start to protect their capital and move to specific sectors within the market to protect their capital.
Utilities have been underperforming all year and are not being talked about by anyone. This is a contrarian signal that it will likely become the sector of choice as fear creeps into the minds of market participants.
The chart below shows price of this sector is trading at the key 200 day moving average which should provide support. Also the bullish chart pattern is pointing to higher prices.
It Is The Season For Utilities!
The chart below clearly shows where price is trading today and what is likely to happen over the next 2-3 weeks as we enter May.
It Is That Time Again – Conclusion:
In short, US equities continue to be in a long term bull market. It is best to remain net long stocks as the odds of a trend continuing is more likely than not.
So I feel a great way to get involved in the market here is to get long the utility sector through the exchange traded fund XLU.
This is just one of many ways to play the market between now and the first week of May… If you would like to learn more or receive my personal trades join my newsletter today www.GoldAndOilGuy.com
Chris Vermeulen
https://thegoldandoilguy.com/wp-content/uploads/2014/03/good-etf-newsletter.png388488adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-04-19 19:15:552015-04-17 17:32:30April/May Safe Haven Play – It Is That Time Again!
A couple of weeks ago I was listening to an hour-long segment on CNBC with Warren Buffett. He brought up a great point about the type of investments he prefers and the difference between an investment versus a speculative trade. I feel what he mentioned is worth sharing so here it is.
He stated that he prefers to hold an investment which is earning money and generating cash flow. Meaning he prefers to own equities of companies which generate income for its shareholders versus a commodity which does not generate any revenue.
While Mr. Buffett said that gold is a commodity everyone should own some of, he also clearly stated that buying a commodity in hopes that someone will pay you more for it later is purely speculative. Lets face it, would you rather own something that paid you monthly or annually a cash dividend or something that might go in in value, but may also lose value?
Investors and traders are primarily focused on purchasing gold stocks, physical gold via ETF’s, gold bars and coins which none of these provide any income the holder. But after doing some in-depth research I have found another way to invest in precious metals and commodities that will not only give you exposure to the gold, silver, and oil sector but it can also generate a monthly income stream to your portfolio.
Through Gabelli closed-end funds like the Global Gold, Natural Resource & Income Trust (GGN), or Natural Resource, Gold & Income Trust (GNT) you can get the best of both worlds.
Each fund is currently providing a 10% annual dividend paid out in monthly distributions. The Fund’s investment objective is to provide a high level of current income. The Fund’s secondary investment objective is to seek capital appreciation consistent with the Fund’s strategy and primary objective. Under normal market conditions, the Fund will attempt to achieve its objectives by investing 80% of its assets in equity securities of companies principally engaged in natural resource and gold industries, and by writing covered call options on the underlying equity securities.
If you don’t know what covered calls – Explained Below:
A “covered call” is an income-producing strategy where you sell, or “write”, call options against shares of stock you already own. Typically, you will sell one contract for every 100 shares of gold or oil stock. In exchange for selling the call options, you collect an option premium.
With the US stock market slowly nearing a bull market top and with commodities trading at multiyear lows we should eventually see a shift in money flows out of stocks and into commodities. With rising commodity prices resource base stocks should start a new bull market that will send these funds dramatically higher in value while still paying a juicy dividend income.
In conclusion, if you want to invest in precious metals long-term I think owning an income strategy based around that investment is a great way to add diversification and income to your portfolio. Learn more about trading ETFs, funds and copy every trade I place with my own money at www.TheGoldAndOilGuy.com
Chris Vermeulen
Disclaimer: I currently own shares of GGN
https://thegoldandoilguy.com/wp-content/uploads/2015/04/gamco.png246267adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-04-12 18:16:552015-04-10 15:19:01True Investments VS Speculative in Gold & Oil
Everyone is looking for the holy grail of the financial market which will tell what will happen next in stocks, commodities, bonds etc… Knowing that the holy grail of trading does not exist I am going to step out on a limb and share my four month stock market forecast along with commodities and bonds.
It is vital that you understand this is a 2-4 month forecast only and as the market evolves my outlook will change as I follow price action as closely as possible.
Here are some key points you need to know:
Bonds should perform well for a few months and possibly a long time until the bear market in US stocks takes hold and is well under way. BUT, the bond bubble will burst eventually when rates start to climb. This could be June, or much later in the year but until then I expect them to rise as the safe haven.
Commodities typically outperform equities during the late staged of the bull market which is what I feel the US stock market is. Resource stocks and resource rich countries like Canada should hold up well, and possibly make new highs going into summer.
Notice how gold and oil have moved from opposite corners of the chart compared to the US and Canadian stock indexes.
During the 2000 and 2008 bear market we saw gold, silver, oil and mining stocks get hit very hard in the second half of the bear market. Will this happen again? I do not think it will because this time rates are at zero and there is only one way to go when they are at the bottom… Up!. This means stocks and bonds will likely both enter a bear market, maybe not at the same time, but they will eventually. This means the only places to protect your capital will be commodities, resource based investments, or simply cash CAD & USD.
Take a look at this 10 year bond price overlaid on the S&P 500 index. So far this year bonds have popped and rallied above short term resistance which we have seen in the past. Big money is rotating into bonds for the time being and this is a warning sign of a stock market top. If you want to learn more about the technical and fundamentals in motion about what is about to happen, why, and when read my ebook “The Global Economic Collapse Of 2015”
Market Forecast Conclusion:
In short, safe havens for investor’s capital will be more of a dance during the next bear market in US equities.
With many countries devaluing their currencies and a potential bull market in commodities I expect the Canadian Loonie and US Green Back to hold the value if not rise over the next year or two.
If you want my long term investing signals my ETF swing trades so you can protect your capital and profit during the next bear market – Sign Up Today!
This week I would like to share with you the strategy that I am deploying to my own investment portfolio. As the US stock market nears completion of a major topping pattern I expect a multiyear decline in the price of equities.
During the past month my focus has been on big picture analysis. Because what I believe is about to unfold will have a dramatic life-changing affect on your financial situation and it is crucial that you realize what is very likely going to happen.
The worst case scenario is that you give back come gains generated during this year bull market, and best case is that you not only avoid the bear market but profit substantially from it.
Let’s talk about the masses for a moment. Unfortunately most traders and investors are extremely bullish on stocks right now and for good reason. Over the past six years you virtually had to just throw a dart at the board and over time you would have generated substantial gains. But because of this luck/success most investors have become overly bullish and continue to buy stocks at an alarming rate even though evaluations are high and warning signs of the stock market top is near.
Simply put there is a time in the market when you should be accumulating shares. And there is also a time when you should sell your equity positions and exit the equity market.
According to my analysis and experience I feel investors should exit positions in equities and focus on a large cash position and/or moving thier money into bonds and other asset classes.
Looking forward 8 to 24 months to protect your portfolio and continue to grow its value will be in Canadian bonds (not US Bonds), precious metals, and in the commodity market as a whole.
Let me explain my thought process behind these ideas briefly:
Canadian Bonds: unlike the US Canadian rates continued to decline. As rates fall we tend to see the price of bonds rise. And when fear hits the overall stock market in both Canada and the USA money will naturally flow out of equities and into bonds as a safe haven. This double flow of money will send the price of bonds dramatically higher.
Precious Metals: precious metals will act as a safe haven, a hedge against currency devaluation which is a huge concern in the future. Small speculative traders are finally not interested in this sector which can been seen by reviewing the COT report on gold. Speculative traders (small average Joe) are now net short gold.
Commodities: resources tend to perform well during late stage bull markets and bear markets. With several of the main commodities trading at long-term support levels and have formed basing pattern we should expect strength in commodities over the next 12 months.
The Plan Conclusion:
Last week I started liquidating a large portion of my equity positions in my long-term investment account. I am currently sitting heavily in cash and will be liquidating more of my equities and rotating money into bonds, precious metals and commodities.
My recent investment purchased was precious metals (gold and silver). This accounts for roughly 2.8% of my portfolio. I intend to build my precious metals holding to be roughly 10% of my portfolio over the next few months. I do have a potential downside target for gold to reach $815 per ounce before bottoming and rocketing higher. Because this is a long-term investment looking forward one to five years I will be scaling into this precious metals position each week as I see fit.
The commodity portion of my portfolio is 3.4% of commodity related investments with a plan to build it to 5%.
After six years of gains in my long-term portfolio I am very comfortable holding 75% Canadian bonds, 10% precious metals, 5% commodities basket, and 10% equities.
Until we get a bear market correction or new analysis points to substantially higher prices for equities I will be playing defense to preserve capital so I have lots of gun powder to re-enter the equities market when valuations, dividends, and higher share prices are in favor.
If you want to avoid the next bear market and possibly generate oversize gains from falling equity prices then join my newsletter today!
https://thegoldandoilguy.com/wp-content/uploads/2015/04/bondsCad.png231305adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-04-05 13:10:282015-04-03 17:22:19A Trading Plan That Could Save Your Portfolio
The question on everybody’s mind for 2015 is when will the stock market start to correct in value and will it turn into a 50+% collapse?
Over the last 15 years investors has been through a lot in terms of market volatility. From the 2000 tech bubble bear market and the 2008 financial crisis bear market investors are far from having their investment psyche scars healing and is for good reason. Many sustained 50+% loss in their portfolio value more than once and are not willing to do it for a third time.
A large group of investors exited the stock market and has never returned. Unfortunately those who exited have missed the seven-year bull market rally to all-time highs. Those who remain in the market are in constant fear that a new bear market will emerge.
The stock market has a tendency to move in a 6 to 8 years cycle. With the current bull market now lasting seven years and was several indicators signaling weakness within the equities market it makes logic sense that a bear market is about to emerge.
The stock market cycle and technical indicators are not the only causes the trigger a bear market. A rising Fed funds rate can cause weakness in the equities market and if you know what to look for you can escape the next bear market and profit from falling prices.
Question: if you could put your money in a guaranteed investment not to lose any principle and receive a 1% per annum return on investment or receive potentially 7% per year but with no guarantee on your principle, which would you choose?
Most people would choose the 7% return option because they understand financial rewards almost always require some risk. Over the last 90 years the stock market has on average returned 7% annualized gains.
Obviously not all years will have a positive gain, but when averaged over many years, it is reasonable to expect an annual return of 7% from the stock market.
What if I told you there is a way to improve on this? For example, if you simply moved your equity investments to a large cash position at the start of each bear market?
The chart below showing the gain from your would have has from 1995 to 2015 by selling all stock holdings when the US stock market topped during 2000 and 2007 avoiding the last two bear markets.
100% cash position during bear markets would have generated 635% ROI, which is a 31% average annual return. The numbers are staggering to say the least. But obviously you cannot pick the exact top and bottom, but even if your timing was way off and you only pocketed half of those gains you would still be way ahead of game.
You may be asking yourself: How do I avoid a bear market?
I believe for investors this is not that difficult because a major trend change takes time and because the moves are so large you don’t need to be perfect with your timing.
Take a look at my analysis charts below. The first one shows the 10 year treasury price which is broken its short term resistance levels and is rocketing higher. We have seen this happen 6-12 months before the last two bear markets started.
Let’s take a look at the Fed rates
Not every rate rise turned into a recession, but nearly everyone has. Rising rates will lead to a market downturn.
Could the next bear market/recession occur when rates start to climb? After analyzing economic data provided by Brad Matheny I have a max rate at 2% over the next couple years.
That combination of technical indicators, analysis above couple with the rising fed rate hikes had created the perfect storm for a bear market to emerge which I expect to last 1-2 years.
Bottom line, we are still in a bull market but only months away from a bear market. Do not ignore these warning signals.
Keep your eye on the 2 year treasury rates instead because they usually lead Fed funds, and will provide an earlier warning signal as to the markets down turn.
When rates start to rise, we may only be weeks, instead of months, before the stock market starts to collapse.
Get My Trade & Investment Alerts:www.TheGoldAndOilGuy.com – Limited Offer!
Chris Vermeulen
https://thegoldandoilguy.com/wp-content/uploads/2015/04/econcrash.png278280adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2015-04-02 03:02:542015-04-02 03:05:23Do Equities Just Correct or Collapse in 2015?
These hard assets being gold and silver will likely be used as the asset to back the coming world currency, after the global economic crash. The ensuing worldwide chaos it could cause when currencies fail, trade fails, and people struggle for quality food is something I hope is avoided.
