Today's Market
by Dr Invest

Gold, Gold, Gold! Like stocks, the mantra has been repeated again and again. Gold may break upward any moment, but it seems that for the present the trend is downward for gold. Now it is not that gold will not rise higher, it will. Just like stocks, one day stocks too will move higher. Oil, the sad puppy it has become, will also move higher in time. The objective in making investments is to see a rise in value, not a decline. In gold, that decline has been 18.42% since the high of $1,900 per ounce in August of 2011.

I can't think of anyone who would recommend buying stocks after they had fallen 18.42% and still seemed to be in a downtrend. And I can't imagine anyone still carrying gold in their portfolio after it had fallen 18.42%. Now if gold began to recover, one could consider that gold had hit a low and there was potential growth.

I see gold no different than stocks or bonds. Gold is a commodity and when it begins to slide, I have no emotional attachment to it... I sell it! That is exactly what happened when GLD began to fall last year. My STOP-SELL automatically sold my GLD position. I didn't cry about it, nor did I go and purchase more gold. I explained to my friends my fear that there was a GOLD BUBBLE. And in this case, I was right! Some of my friends are still waiting for gold to recover. The honest question is "What will you do if gold continues its decline another 18%?

I don't have an investment in gold at this time and wouldn't buy gold until it shows promise as an investment. Listen, even if gold has gone up 500%, you can't afford a 20% loss. Think about $100,000 investment in gold...it has grown to a value of $600,000 and a 20% loss of $600,000 is $120,000. Can you afford to lose $120,000?

It doesn't matter whether it is stocks, bonds, or commodities don't settle for losses. I determine how much I am willing to lose before I make an investment and then move a stop-sell behind the closing price of the investment. When I see a weakness in the stock, I move the stop-sell even closer to the closing price. My objective is "Don't lose money!"

Consider looking at gold without rose colored glasses. Treat it as you would any other investment. If it doesn't perform, sell it!

(note: the above information is for entertainment purposes only and not to be used as investment advice.)