HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.
In Interim Bulletin #136A, December 22, I reminded you that there had been a great run in the precious metals, that nothing goes up forever, and that the leaders on the way up, Silver Wheaton (SLW) and Market Vectors Junior Gold Miners (GDXJ), were under-performing.
In Interim Bulletin #138A, January 6, I expressed concern about a possible correction and told you what to watch.
Unfortunately, the precious metals really broke down today. It looks like the correction has started. See chart of SLW (page 2) and GLD (page 3. Note: that looks like a head and shoulders top).
I, and I believe no one on earth, knows how deep this correction will go or how long it will last. I suggest:
1) Do not sell your physical gold.
2) The vast majority, I repeat, vast majority of people who think they can out-trade the market can’t. You are much more likely to get whipsawed (buy high and sell low), and under-perform. Selling is not that hard when it looks like something might fall. The problem is it then takes real stones to buy back in when things are falling apart.
3) If you have been waiting for an opportunity to add to your physical or paper positions in the precious metals, now is your chance. It is tough to pick the bottom. A better way would be to “average-in”, buying some particular amount each period of time or each drop of some particular amount.
I believe this is just a correction (of unknown length and severity) in an on-going bull market in the precious metals that has a long way to go and many years to run.
RMD
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