Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
How to Capitalise on the Robots - 20th June 24
Bitcoin, Gold, and Copper Paint a Coherent Picture - 20th June 24
Why a Dow Stock Market Peak Will Boost Silver - 20th June 24
QI Group: Leading With Integrity and Impactful Initiatives - 20th June 24
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24
Bitcoin Trend Forecast, Crypto's Exit Strategy - 31st May 24
Zimbabwe Officials Already Looking to Inflate New Gold-Backed Currency - 31st May 24
India Silver Imports Have Already Topped 2023 Total - 31st May 24
Gold Has Done Its Job – Isn’t That Enough? - 31st May 24
Gold Stocks Catching Up - 31st May 24
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Offer The Most Profitable Secular Opportunity Today

Commodities / Gold and Silver 2015 Aug 14, 2015 - 01:50 PM GMT

By: GoldSilverWorlds


July was a horrible month for precious metals prices. Sentiment reached levels never seen before. As metals and the miners broke through a long term support line, so did pessimism.

To get an idea of the level of pessimism, we are including a very long term chart going back to 1992 (courtesy of Sentimentrader). As readers can see, market sentiment in the last 2 years is worse than the bear market lows of 1998 – 2000.

When everyone panicked in July, we urged investors to stay calm, and look at the gold market space being an opportunity. A contrarian call which characterizes our vision. For instance, our column of July 19th contained the following quote:

“Can precious metals go lower from here? Yes, no doubt. But, if we get a breakdown, then a sharp V-shaped recovery should take place very quickly. In that sense, timing the bottom is a fool’s game. Investors will be chasing the gold price, with little success whatsoever.”

Two weeks later, on August 2nd, when literally everyone was throwing in the towel, convinced that gold would collapse to $800 an ounce, we wrote the following:

“Although we do not believe that markets trend higher or lower based on ‘reasons’, we still think there are two signals that indicate there is not much downside left for gold.

So rather than panicking, we look at the level of hate surrounding the gold market, and we become more bullish by the day. We believe that smart investors should be preparing their shopping list right now, instead of reading mainstream media headlines about gold.”

Indeed, it is our job to guide investors through rough waters in the markets. When we become contrarian, there is a good reason for that. Gold, silver, and miners are undervalued. The correction has been too long, too sharp. Over time, a mean reversal will take place. Gradually increasing positions in undervalued assets is what secular investors should do in order to tap into the potential of the market.

Investors are faced with a serious challenge: how exactly to play the beaten down precious metals sector? If anything, investors must avoid too much risk when putting capital at work.

There are four rules that investors should take into account which, especially in these hard times, are important to respect in a disciplined way. Admittedly, it is a contrarian approach, and it is probably not what most investors would do.

First rule: always stay diversified when it comes to your investments. It is imperative that the holdings in your portfolio are sufficiently spread across assets and segments (stocks, commodities, precious metals, countries, etc). This has become such a ‘cliché’ that most investors are simply neglect it. But a well diversified portfolio allows to grab the opportunity of collapsing precious metals, which, at some point in the future, will reverse their downtrend. Because of the technical damage, repair time itwill take quite a while. Meantime, secular investors should be using their time to analyze which companies are able to survive this storm, in order to make up their shortlist of future ten baggers.

Second rule: only add gradually to your positions. That assumes that your additional positions remain relatively small. It also assumes that you have, at all times, liquidity available. Picking a bottom or a top is a fool’s game, so your positions need to be managed, literally, over time, based on the evolution of the market.

Third rule: value will never disappear, and it will be rewarded at some point in the future. Companies that ‘possess’ true value are heavily sold right now, just like almost every company in the commodity and precious metals space, but to a less extent than their peers. Secular investors are focused on true value. Let’s face it, a miner that is producing gold at below average production cost, has a pipeline with exploration projects with high-grade metal, and has its finances under control, has value that will not magically ‘disappear.’

Fourth rule: your portfolio must be future proof. In today’s world, that means that you should anticipate rising interest rates. One of the key themes at Secular Investor is that the top of the bond market is in, so investors should prepare for a world of rising interest rates (hence, lower bond prices). That means that your selection of assets and stocks should not contain companies that are heavily indebted. It definitely adds to the complexity, but we believe it will largely pay off in the future.

Stay calm, focus on the big picture, manage your investments … and above all, manage your emotions. Secular investing pays off over the long term.


Secular Investor offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the Gold & Silver Report and the Commodity Report.
Follow us on Facebook ;@SecularInvestor [NEW] and Twitter ;@SecularInvest

Source -

© 2015 Copyright goldsilverworlds - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in