goldsilverworlds.com / By Gold Silver Worlds / March 11, 2013
Contributor Gary Christenson has been focusing lately on the fundamental motives of investing in physical gold and silver. He has written some excellent pieces in which he explains the key principles of owning bullion. This article summarizes the key benefits of investing in the precious metals.
For bullion investors, it is a great way to focus on the fundamental reasons why they have chosen to own PHYSICAL gold and silver. Especially in times like these, where the media is using every bit of news against the precious metals, where almost all major financial institutions revise their gold forecasts downward, and where the number of statements pointing to the end of the gold bull market is countless.
(1) In bull markets, prices go up only 60% of the trading days
Bull markets include many down days and weeks. If we became discouraged every time gold moved down on a particular day, we would live 40% of our life feeling discouraged by the quite common downward moves. Bull markets move up slightly more often than down and bear markets do the opposite. Think three steps forward and two steps backwards. That is the nature of markets.
Even in powerful bull markets, the price will probably go down about 40% of the time, based on daily prices and 30% based on weekly prices.
The “bull” will do everything it can to buck you off and force you out of the market. Bull markets never make it easy. By the time it looks easy (say early 2000 in the NASDAQ), it is too late to buy and it is time to exit.
It takes emotional stamina to hold your positions, and it takes determination to maintain perspective. Look at the weekly and monthly trends, look at the fundaments, and look at the sentiment.
(2) Holding physical bullion and “trading the metals” are different things
The gold market went down lately. Silver was down even more, and those of you who own physical gold and silver LOST NOTHING in the take-down.
If you are accumulating physical metals, now is an even better time than any time in the last five months. The stuff is on sale – take advantage of the lower prices.
If you were leveraged or long the futures, you have my sympathy. I hope you had stops in play.
Markets bottom when the sentiment is least bullish or most bearish. The sentiment numbers currently indicate massive pessimism in both gold and silver markets. Great bottoms are constructed out of overwhelmingly bearish sentiment.