In gold investing – or for that matter any investing – in the past it rarely paid the individual investor to be a lone gun. Posted by James Randolph on July 20, 2011
There is no ceiling in sight for gold market prices.
July 20, 2011 – In gold investing – or for that matter any investing – in the past it rarely paid the individual investor to be a lone gun. Being the one in a thousand to hit on some unexpected movement paid very big, but the odds against being right while everyone else – including many highly successful pros – were astronomical.
Still, on rare occasions individuals have had flashes of insight that were off mainstream radar. You never heard of the ones who regularly cashed in because they had nothing to gain by sharing what they knew. To others, however, recognition of their self-proclaimed brilliance was more important. The irony is that the former had the gift while the latter usually proved to be “one-hit wonders.”
While nothing prevented the household investor from beating the system, most of us were almost always better off not going too far out on a limb.
In all of that the past tense was intentional. Today there is a distinct advantage to being unschooled in the sacred economic paradigms that have dictated the moves of big money for over a century. The world is undergoing fundamental change and there is no mystery about where it is heading. Yet conventional wisdom maintains that investment strategies somehow need not change with the times.
Nowhere is the flaw in that logic more apparent than in the gold market. Every traditional investment is either in imminent peril or is subject to unacceptable uncertainty, while conditions are indisputably ideal for buying gold. Yet investor participation – especially in long positions – remains extremely weak.
Opportunity is not just knocking, it is beating down the door. And it favors common sense over doctorate degrees and supercomputers that analyze real time movements down to the second based on decades of historical data and obsolete algorithms and produce highly accurate predictions of how things would have been had the world not changed.
Now that gold has slipped by the $1,600 mark the computers will undoubtedly start cranking out dire forecasts for gold’s future. But common sense tells us that in the absence of an inconceivable reversion from globalization to the glory days of the mid 19th century, there is no ceiling in sight for gold market prices.
Senior Staff Writer – Certified Gold Exchange