I just spent an hour on Skype with my Financial Adviser back home. We were talking about our precious metal (gold) shares. They have shed about 20% of their value over the last couple of weeks. He told me that hedge fund giant George Soros has dumped about half of his gold shares and this combined with a downward trend in gold succeeded in pulling the rug out from under the share price. His sale has affected the price of gold and put an excess of gold shares on the market. The 20% loss is about what I was planning on spending on a newer used Honda this year. It is a good thing the old car got revitalized, I will have it for a while longer.
It was a tough decision but we decided to ride it out. It is a substantial amount of money but a relatively small part of my total portfolio, which has been showing a 6% per year gain even with the gold shares. He says this puts me in the top 10% of his clients. What I am losing in the gold I am more than making up for elsewhere.
We also took some substantial profits out of our gold shares last October just after they made big gains so things are not that bad. They may continue to drop in the short term but neither of us can see them tanking. After all, it is GOLD and gold is what offers stability in the market. Darn you George Soros!
Chris and Juan, since you are near Wall Street, could you have a word with George Soros for me?
Thanks George:
Isn't it amazing just how much power George Soros has and the effect he has on Wall Street stocks? Considering that most of the US gold is now 45% controlled by China with another 40% controlled by Japan, it leaves few reserves in the US economy.
ReplyDeleteHe certainly has the ability to make small investors feel helpless as he dumps what amounts to a small part of his investments and messes things up for us little guys.
DeleteSo maybe it's time to buy??
ReplyDeleteProbably but I used up my cash reserves on generator parts. Anyway, Norma says it is time to start selling and spending, not buying and saving. Maybe for a young guy like you Rod!
DeleteC'mon, you've got money you haven't spent yet!
ReplyDeleteCroft while I agree with you on the 'hold' strategy, I think your broker is full of it. Soros sold the vast majority of his gold holdings almost 2 years ago. http://www.huffingtonpost.com/2011/05/17/george-soros-gold_n_863083.html. I do however believe that if you are doing a 6% return on your portfolio that it is doing well.
ReplyDeleteHugh in Dallas.
Deletegold has been in decline for a few weeks and Soros dumping a major part of his gold shares contributed to the recent sharp decline. Many market analysis websites agree with this.
I do however think there will be a rebound after the dust settles. Whether it will come back to recent highs is unknown. I probably should have sold all of it when I did my profit taking in October.
Remember back when we complained loudly if we were "only" making 10%?
Personally I think riding it out is the best route. If you are still getting a 6% return thats pretty good. The los is only on paper until you cash in.
ReplyDeletePersonally I agree with Norma, start selling and spending. What's the point of keeping all that money tied up, you worked for it so enjoy it, before it's too late.
ReplyDeleteI suspect it is more of a factor of the stock market flirting with record highs causing regular people to cash out of metal and go into productive stocks, stocks based on consumer goods. Gold is a hedge against hard times, things are picking up from what I can see.
ReplyDeleteThe banking storm in the US is about over, people have come to grips with their current home value and are looking to spend a bit more than they were willing to in the last six years. I think we are going into an upturn in general stocks, if that is the case then reserve type metals will be static or decline, consumer metals like nickel, copper and iron will do well.
Linda and I are in Merida-it's as hot as billy blue blazes.
I love Merida! We usually spend a week there visiting our friends Jonna and Mimi. I am going to miss it this year but we are enjoying the slower pace we have chosen this year.
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