Stay the course. That's what I told a good friend of mine this past week who was getting anxious and nervous about gold and silver shares not performing at the higher levels he thought they should be at by this point in time.
He told me the past year and a half have been really hard to get through. Friends of his who are invested in the dow saw half their portfolio evaporate in the financial collapse of 2008 and 2009. My friend saw 80% of his gold and silver shares evaporate in the same period. He's having a hard time reconciling the fact that many of his friends have seen their stock market portfolios rebound almost completely, while his gold and silver shares have only recovered halfway. His friends, his family and even his wife, are questioning his rationale (and judgment) for investing in gold shares. To complicate matters, the difficult economy has forced him to sell a little bit of his gold and silver, just to stay alive, and keep the wolf away from the door, this past year and a half.
Click to Play Robert Ian's GoldSeek Radio Commentary Download mp3
This is not a unique story. I have heard many similar stories over the past year and a half, and indeed, some gold and silver investors have not been able to hold on during the economic collapse. In this economic storm, almost everyone has been wounded, and there have been financial casualties, among even those individuals who thought they had done everything right. One of the hardest concepts to reconcile with oneself, is that it is possible to do everything right, and still get hurt, in most cases for reasons outside of your control.
One of the fears some people wrestle with is what happens when the market eventually takes another hit? or there's another terrorist attack? or we go to war? or some other unanticipated event strikes at the heart of the economy? What happens to gold and silver shares this time? Do they collapse along with everything else like they did in 2008?, or do they decouple from the market, like they did several months after 911, and move up rapidly?
There's a growing body of analysis that suggests the collapse in commodities in 2008 was an engineered collapse designed to steer money out of commodities and out of the stock market, and in to US treasuries, thus creating (at least temporarily) the appearance of a strong dollar. This scenario is not likely to repeat itself. Fool me once, shame on you. Fool me twice, shame on me. Too many people have been hurt by what happened in 2008 to be fooled a second time. Besides, those who wanted to unload (or at least lighten up) on their dollar denominated securities most likely did so when the dollar spiked to 87-89 on the US dollar index. For the dollar, those days are no more. And for the stock market, it could be testing new lows in the not too distant future.
I believe the last man standing, the last investment standing, will be gold and gold shares. If you have weathered the storm thus far, and are still in the game, even if its been a tough year and a half, and even if you had to sell some of your gold or gold shares at these low levels just to stay alive, I believe you're going to be rewarded for your conviction.
In the wake of the next economic event, your gold insurance is going to pay off. Don't fret about what you've had to do to survive the past year and a half. The important thing is if you're reading to this article, you're still alive and you're still in the game. The rainy day for which you have been investing in gold, has been occurring for the past year and half. You're in it right now. That rainy day, has been a rainy year and a half, but that is about to change. The rest of the world that's invested in currencies, or the stock market in general, is about to enter the storm. Gold, on the other hand, is about to emerge from that storm, and will never look back. Onward and upward... because the best is yet to come.
