|The key is to beat ^XAU and ^HUI indexes with your mutual fund. |
Oh, like my (large, > 15%) gold holdings in tinyurl.com Vanguard Precious Metals Fund VGPMX, with the 0.48% total expense ratio ?? Sorry, I could not resist a big grin when I read that comment from Wade.
What do you guys think of the explanation on the Prudent Bear Website - the presentation, "Why Gold?" at prudentbear.com ?? I have done pretty well in the past 4 years from finding the smelliest assets (gold, vanguard pacific stock index fund), holding my nose, and investing. My timing has been stomach-turning - usually there is an immediate 20% drop in the investment value, but I am happy with the 40% and 200% returns since those initial investments have been done.
I don't think you can buy an asset until you know when to sell. The Dow:GoldPrice ratio, which is historically 10x, suggests a selling price of $1100 per ounce. If we are looking for a bottom in the gold price, a price of either $2000/ounce (or a dow of 5000) is possible. I don't really care which one it is as long as I have a substantial fraction of my assets invested in gold or gold mining shares at that point.
If you look around the world, you see countries such as Japan and China printing up horrendous amounts of cash to try to stimulate their economies, and now the USA is doing it too with its deficits, and you've gotta realize that at some point the central bankers will not be able to sterilize all these outrageous amounts of cash, and they will leak into asset prices or cause a debt-deflation. Then, you need to get really pissed off at how these central banks are playing you for a chump unless you invest in a non-inflatable asset. Then hold your nose, and invest in gold, and sleep at night, soundly.