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I really struck a nerve here on Friday!
Hundreds of our readers jumped online to answer the question of the day:
Is this the time to load up on gold, silver and other precious metals … or not? Why?
How much of your portfolio have you invested? Do you plan to buy more in the months ahead?
Which are your favorites? Gold? Silver? Platinum? Palladium?
Surprisingly, a few of our readers are precious metals skeptics:
“I don’t see gold soaring this year as a lot of experts expect,” says David Y., “because I feel, as long as other currencies around the world are in trouble, the U.S. Dollar will stay about where it is or even get a little stronger. Foreign investors will still have faith in the U.S. dollar and gold will stall.”
But the vast majority are clearly bullish on precious metals in 2010 and beyond:
Eric agrees that gold prices will retreat, but sees that as a reason to buy: “I believe gold will drop further as a knee-jerk reaction to the idea that we have commodity deflation. This is, in my opinion, a good time to load up on physical gold as a dollar hedge. I like to keep 5% of my assets in physical gold.”
Jay is looking for profits of up to 36% or more in gold over the next three years: “Just about every major industrial nation is inflating its currency. They are promoting growth of money supply over fighting inflation. With Ben at the helm, the price of gold in dollars will continue to climb. I expect gold at $1,200 by the end of 2010 and over $1,500 by the end of 2012.”
Scott V.R. is a super bull with almost a third of his money wrapped up in precious metals: “If you have the guts to live with the fluctuations, it is time to load up with metals. As long as the government keeps printing money and banks continue to be net buyers instead of sellers, we will continue to see gold and silver as a safe haven. I have about 30% of my portfolio divided between mining stocks and bullion. Mostly gold and silver and a little platinum.”
Phil, who also says he has about 30% of his money in gold and silver, couldn’t agree more: “The recent price pullbacks present a buying opportunity. I favor silver as a two-way bet: Its uses are primarily industrial but it is also regarded as a bullion commodity so it will tend to go up with gold. Plus demand exceeds supply and that is unlikely to change.”
Speaking of silver, it seems to have attracted quite a fan club, lately:
Al in Arizona: “The current ratio of silver to gold is 66 to 1. This will continue to grow closer, making silver a better deal than gold. Any silver under $20/ounce is a steal. It’s destined to go up 20% in three months. Load up now.”
Gerald says that longer term, silver could soar 250%: “If the gold/silver ratio ever moved back to the more traditional 20/1, silver would need to move up about 2.5 times its current level.”
Marilyn G. seems to prefer palladium.
“Well,” she writes, “I don’t know why palladium is going up so nicely, I only know it is. But my thinking is, since palladium is the sister metal to platinum, might not car makers substitute palladium in future catalytic converters for expensive platinum?”
Judging from these and hundreds of other enthusiastically positive responses, it’s clear that, among our readers, precious metals rank highest of all the investment classes we’ve discussed so far. I’d guess about a NINE on a scale of one to ten.
My view: No matter how good an asset class may sound — in theory or in practice — NEVER overinvest. Keep your money spread out over all FIVE asset classes. And if the conditions are ripe for major declines, consider also playing the downside.
Tomorrow, we’ll take a look at how our readers define the optimal growth portfolio for 2010 — but first, I have one last asset class I want to cover: Currencies!
New ETFs make investing in euros, yens, pounds and other currencies — either for moves UP or DOWN — as easy as buying stock in IBM or Microsoft. And we’ve all seen how dramatically the U.S. dollar can fall — or rise — against them.
So what do YOU think? Just click here and post a comment to answer today’s “Question of the Day:”
Do currency ETFs have a place in your portfolio?
Which currencies — the U.S. dollar, Canadian or Aussie dollar, euro, Japanese yen, Chinese yuan, Brazilian real or others — are you most bullish on right now?
What percent of your total investment capital do you invest in currencies?
As always, I’ll add my own thoughts to yours. And then, we’ll move on to the next major step — to build an optimal growth portfolio for the year ahead!
Best wishes,
Larry
Related Posts
- The optimum growth portfolio for 2010 (02/03/10)
- Commodity windfalls ahead … or not? (02/02/10)
- Foreign stock bonanza ahead … or not? (01/27/10)
- Only 8 hours left for LARGE global profits! (08/12/09)
- Time to load up on gold and silver? (01/29/10)
{ 36 comments… read them below or add one }
Hi Larry, I just want to tell you how much I appreciate the energy and work you are putting into your emails. Your information is clear and understandable for the ‘commoners’ out here. I have been investing on my own for about 10 years and have made/lost money ( like everyone, I guess), but am happy with the results. The more I learn, the more I realize there is even more to learn. Keep up the good work, and thanks. Jerry Draheim
Larry Edelson Reply:
February 3rd, 2010 at 11:11 am
Dear Jerry,
Thanks for the kudos, and best wishes to you and yours. — Larry
Hi Larry,
Currency is a funny thing these days becaue it seems to be a race to the bottom. I am Canadian and therefore hold Canadian currency ETF’s, I also hold the Yuan and a US dollar bear fund. Total about 8 % of my portfolio.
I feel pretty good about the Yuan appreciating and fairly certain that the USD will drop (eventually!!!) otherwise I think that the currencies are unsettled…who knows what will happen with the euro and the yen is not looking very strong either.
PS If I were Australian I would have bought Aussie instead of CAD etf since our countries have a lot of similarities and seem to be fairing better.
Thanks for your insight!
Larry Edelson Reply:
February 3rd, 2010 at 11:12 am
Dear Syvlie,
You’re absolutely right! Almost all currencies are in a race to the bottom, with incessant central bank printing and devaluations looming. I love the fact that you’re diversifying, as clearly, some currencies – like the dollar – stand to lose purchasing power than others going forward. – Best, Larry
Based on advice from an independently wealthy family friend who was a currency trader over 25 years for a major international bank , we have NONE of our retirement funds in currency or related investments. According to our friend, trying to call market turns or trends of currency is worse than a fool’s errand. Few professional traders in the field succeed more than 50% of the time, and they have enormous advantages that small investors don’t: the buy-sell spread for currency purchases by a professional in banking is much narrower than for the small investor. You can lose money even when currency exchange rates rise or fall by 20%.
I’d like to follow up on earlier comments by other posters if I may, about a potential bull market in Gold and Silver… Like some others, I’m also leaning toward skepticism and uncertain of which way to jump. In 2007, a number of newsletter writers were talking about “fundamentals” in similar terms to those used in Larry’s newsletter. When gold was trading around $950, they were urging readers to get in with both hands. Then along came a year of sideways and downward prices, leaving gold at 705 by November 08. Funds like Vanguard Precious Metals and Mining (which holds both gold and silver and foreign commodity stocks) took a bath right along with the rest of us. There were weeks between June and October 08 when the spot price of gold dropped by $100 dollars per ounce.
We tend to forget amidst the hype and hoopla, that gold, silver, platinum and paladium are all industrial metals, regardless of whether some folks believe they are the only “real” money. Platinum is the primary catalyst in automobile mufflers. If or when industrial demand drops off in a second and possibly deeper “V” of the recession we’re in, there is every reason to believe that industrial-related commodity demand and prices will fall at the same time, just as they did in the Fall of 2008.
Larry Edelson Reply:
February 3rd, 2010 at 11:12 am
Dear Red,
Certainly, timing any markets is difficult, at best. Especially short-term movements. But there are certainly ways to hone your timing for the long-term, with a disciplined approach. After all, there’s one thing that never changes – human nature. Fear, greed and all the other emotions that drive mass human behavior have not changed since the beginning of time. – Best, Larry
Larry,
Currencies through ETF’s is a part of my Portofio and yes they should be, but only about
5% maximum. I feel the dollar is still going to strenghten somemore even maybe for 3 to 6 months.
I would have a tendency to short the Euro and British pound as they are in worst shape than us.
The U.S. Dollar is still the world’s reserve currency even though there is a lot of talk and pressure
to do otherwise and the U.S. has supposedly stopped pumping dollars into the world markets which
means Foreign Governments will need to buy our dollars for a while longer if that is true.
Dennis
Larry Edelson Reply:
February 3rd, 2010 at 11:13 am
Dear Dennis,
Interestingly, if you have 5% of your portfolio in foreign currencies, that means you have 95% in the dollar, or dollar-based assets! Just another point of view. – Best, Larry
Nov. 09 you have several stocks marked Stop Hit does that mean the stock position should have been closed out. I’m still in GG, ABX, KGC, IAG. If I missed a sell signal on 10/23-28/09 would you recommend selling, with a possible buy back at a future low?
I don’t have a lot of money to buy any currecy, so until I get rich and actually have throw-away capital to invest, there is no point buying anything. Gold is too high right now to be worth it, and of course unless your coins are extremely rare, coin collecting is a waste of money to.
yes currency does have a place in my portfolio, my question to you is what about the Iraqi Dinar, do you see any growth there?
as long as we keep printing and borrowing money the long trend for for stuff…gold silver ..even real estate..evenyually as to be up…someone tell me that I am wrong and why…glad to listen…Donn..PS….every 51 seconds our national debt goes up 2 million paper bucks
as long as we keep printing and borrowing money… the long term trend for for stuff…gold silver ..even real estate..eventually …has to be up…someone tell me that I am wrong and why…glad to listen…Donn..PS….every 51 seconds our national debt goes up 2 million PAPER bucks
All I need to know is which ETF do you recommend. I’ll buy it.
I have a good but if gold and silver, antiques, have been watching the news/ads .. you are right, their value have decrease, not sure why, since the economy is so poor, I would think their value would have increased.
Perhaps you would be willing to give some information as to why; and what recommendations you have regarding what I have.
Thank you!
I trust that this “site” is secure.
I don’t invest in currencies because potential is low. There is much better potensial with gold and silver. the real money is gold. 100% of my investment is on china, gold or silver related 10 companies. Why? Because I have nothing to lose, only $40K total. It is either lose some or gain crazy when inflation happens. Things are not getting cheaper with less demand, that is sign of inflation.
As a canadian investor using canadian currency I have invested in oil producers, precious metals and bric funds, I am nervous of the coming year and not sure to leave these mutual funds as is or to start investing on my own through a brokerage account. Its not a lot of money but its my money. Maybe cash is king for the near future?
I am not in any currencies due to my lack of knowledge on the subject and aversion to risk. I prefer solid assets and currencies seem to dependent on unseen forces around the world. I have mutual funds in US stocks and International stocks with Vanguard and have taken profits of the Total Stock Market Index fund since I feel I need to have a defensive position in case the market dives.
Seeing the 30 yrs experience claimed by writer, made me respond. 70’s was directly hands on physical numismatics, bullion and also road the Hunts silver fiasco, trading the futures marketon silver. Saw the highs lows in metals and oil&gas! Where do they go from here? Obviously with present and more coming GOOOOOLD touts, companies if you will. Being able to take physical delivery is key ingredient if its longterm safety position on forthcoming crisis. Remembering it takes two sides to make a market, that playing on fears of others creates a market full of hustles. Plain and simple being careful. Perfect example, was/is on oil&gas, general/limited partnerships. When it takes a book of paper to supposedly secure both parties with legal mumbo jumbo, you can be sure protection is on sellers side exposure rather than investors side. FACT!! Continued gov regulation is always the EXCUSE on seller side, they then use it to sell their own creditability. The 5 g’s Guts, Grub, Guns, Gold, God. Whatever order they’re placed and necessites. Always using the old 5 W’s,
Who, What,Where, Why, When with the 5 G’s keeps safety in line. Gold thru nothing more than market enthusiasm, uncertainity means up, up and away with profit taking along the way. Oil, the black gold, different because it produces income, overcoming the negative on gold. Rations of 5/10% Gold at the base of the investment pyramid definintely should be raised to 20/30% of assets. Problem to overcome is premium on true numismatics, with my only recommendation being fractional wherever from whereever. Always loved the old always get a suit for $20 gold piece. Bullion of any kind held, bars, refinable whatever I mean what are you going to do, shave a piece of it? Small, fractonal gold should be being taken on. Bullion and paper gold held by others should be a profit vehicle, as key is “held by others”. During crisis you never know how a person, persons going to react in real crisis, they in it also! Investing in private, closedly held oil&gas production income SINCE
THE WORLD HAS TO HAVE IT appear only true safe havens with both protection and profit,.
Santa fe Steve
Seeing the 30 yrs experience claimed by writer, made me respond. 70’s was directly hands on physical numismatics, bullion and also road the Hunts silver fiasco, trading the futures marketon silver. Saw the highs lows in metals and oil&gas! Where do they go from here? Obviously with present and more coming GOOOOOLD touts, companies if you will. Being able to take physical delivery is key ingredient if its longterm safety position on forthcoming crisis. Remembering it takes two sides to make a market, that playing on fears of others creates a market full of hustles. Plain and simple being careful. Perfect example, was/is on oil&gas, general/limited partnerships. When it takes a book of paper to supposedly secure both parties with legal mumbo jumbo, you can be sure protection is on sellers side exposure rather than investors side. FACT!! Continued gov regulation is always the EXCUSE on seller side, they then use it to sell their own creditability. The 5 g’s Guts, Grub, Guns, Gold, God. Whatever order they’re placed and necessites. Always using the old 5 W’s,
Who, What,Where, Why, When with the 5 G’s keeps safety in line. Gold thru nothing more than market enthusiasm, uncertainity means up, up and away with profit taking along the way. Oil, the black gold, different because it produces income, overcoming the negative on gold. Rations of 5/10% Gold at the base of the investment pyramid definintely should be raised to 20/30% of assets. Problem to overcome is premium on true numismatics, with my only recommendation being fractional whatever from where ever. Always loved the old always get a suit for $20 gold piece. Bullion of any kind held, bars, refinable whatever I mean what are you going to do, shave a piece of it? Small, fractonal gold should be being taken on. Bullion and paper gold held by others should be a profit vehicle, as key is “held by others”. During crisis you never know how a person, persons going to react in real crisis, they in it also! Investing in private, closedly held oil&gas production income SINCE
THE WORLD HAS TO HAVE IT appear only true safe havens with both protection and profit,. Purity, price per gram will be irrelevant if first thought is security! Benchmark price on gold, oil will be willing buyer, willing seller, not a market quote basis. Paper markets on anything is only trading, looking for profits. The dollar? Why can’t events that have happend, worldwide over time happen here. All you have to do is realize, we are so young as a country that only short history has prevented it, not democracy, not government, time, time, time. Dollar down, gold up, oil up its a given. Been there done that, made it, lost it, made it, lost it sitting on cruise control right now, lot due to few pieces of gold, few income interests on oil&gas. Looking to grow financially, very, very, carefully. Realize majority of stocks nothing more than what someone will pay, someone will preach! 10 times, 20 times earnings, hellooooo. Market equities are for trading paper! Gold in hand, oil&gas courthouse owned equity with monthly checks only reality. Over 40 years in real estate, only conclusion that if you don’t use it, don’t own it. Who, why, when, what, where other than niche markets with niche property. Own now historic district, views, one of santa fe properties I mean someone want it? Gong to cheaper economy watch pump jacks go up and down. Good luck
Santa fe Steve
I have no ETFs but have played with the idea of adding some. It would be US $ or the Euro, definately no Japanese yen. I could use some more education on the subject.
A simple question: When is lithium going to jump in the precious metal picture? In the next 15-20 yrs it will be a hot_hot_hot item.
Larry you’ve ben asking us lots of questions, and I believe deversifying is the best, But Im waiting for you to tell us what you really think what % should be invested in each class, how to maximize the next move, should we short the dollar, by china, india, Indonesia will they grow this year? I dont think the us will, to much debt and spending on all the wrong things
Precious metals & currencies should break record territory…..however, we don’t know what smoke and mirrors “O” will use to trick the folks into not making what should be the best move…..
Currency ETFs would be great to have some money in especially when we can bet against the dollar.
But thats what we have gold and silver for. It would be another tool in our arsinal to utilize when the dollar has it’s little retraces though if it is a 2X$ short setup. I would go for something like that !
After WWII ended, in Russia a 5 carat diamond bought a peck of potatoes. I think commodities is the way to go.. perishable ones. It might take a pound of gold to buy a future peck of potatoes.
currencies do not excit me; but Canada, Australia, and maybe, Brazilian currencies.
i see you are gathering information from your viewers so you can buy low then tell everyone to buy so your stocks go up cramer same way brilliant!!!
The strongest economies, all things considered (especially GDP to debt ratios, and GDP growth) tend to have the strongest currencies. I believe the BRIC currencies offer the greatest appreciation potential vs the dollar. The BRIC currencies will likely have more volatility than say the Swiss Franc or the Australian Dollar, but the long term appreciation potential is much greater in my opinion. The USD is obviously hosed long term, especially when you have someone running the show that has no concept of running a small business let alone a nation and one who has lived his entire life with the entitlement mentality. God help us, this man is truly a fool!!!
I currently have no exposure to currencies at all. I don’t know enough to feel comfortable investing in these, yet, as I’m still learning about the ways of such holdings. Or should I say the consequences.
Gold & Silver are in for a long ride down the slippery sloap,if you are chart wise , short term ,trade the long& short side ,if not sell into strength,Robert
Larry, I have some silver and gold in Perrth Mint, and two silver mining companies, which is 30% of my port folio.
I have about 13% of my portfolio in foreign currency CDs (euro, Norwegian krone, Canadian dollar, Swiss francs, Brazilian real, Australian dollar). I especially like currencies of countries without much debt (e.g. the krone). I think the Brazilian real has bottomed and has upside potential. I’m currently researching foreign currency ETFs and would love to hear recommendations.
I firmly beleive that Gold will drip to the $1,000.00 level and maybe a little lower at which time I will be a buyer. I bought all the way up to $1,000.00 and then stopped. I had some insight as to buying the Canadian dollar in March of 09 and “blew it off” to my detriment. I would like to become a little more knowledgeable about currency before getting in over my head. Silver, I think, will be a much better play as we globally come out of this world recession over the next 3 to 5 years.. it’s industrial use will probably hold and rise in price by margin will much more profitable.
Larry,
Yes, currency ETF’s certainly do have a place in a portfolio. I happen to like the WisdomTree Dreyfus Indian Rupee Fund ETF (ICN). I think a Rupee investment has good potential and the Rupee is overlooked by many currency investors.
What are the major, currency ETF symbols?
Gold will not drop below $1000…It will continue its roller coaster ride with death defying plunges..AND stratospheric heights until it reachs $3500..after that..I’ll just watch..
…
Currency ETFs: Too easy for any nation to devalue theirs at drop of hat..So I don’t go there..
I’m currently a very small player in Australian 3 month CDs thru Everbank…
due to their interest rate…
What do you think of this?
http://www.guardian.co.uk/business/2010/jan/31/commodity-funds-warning
We now have $325,000 worth of debt for every American citizen. We have a 3.5 trillion dollar budget where over half is directed towards our debt and interest. We are close to having to accept a government run health care system that will cost more than our nation can bear. We have a green energy programs that costs more, employ less, and stand on a global warming premise that is not scientifically based. Small businesses making over $250,000 are going to have to bear a huge burden over the next few years and if they go under they will take many jobs with them. We have an imminent threat of terrorism on American soil that would push us into the worst depression this nation could imagine crashing the American dollar. I pray that doesn’t happen. We are becoming slaves to the Chinese with our exhorbant debt. The majority of the world is going off the American dollar as a reserve monetary system. Interest rates will be raised once other countries realize we can’t pay our debt and it looks like that is about to happen. I believe we are in serious trouble, and there has never been a better time to buy silver and gold to secure your finances. My recommendation is if you want to make money on your precious metals buy collectible coins. They have brought 20% to 75% returns throughout this recession. My suggestions for other investments: mining companies, food distribution companies, anything having to do with long term storage units for rent, long term emergency food supplies, water filtration, outdoor equiment, small arms manufacturing, and alternative fuel production just to name a few.