Who has not heard $5,000 gold, $10,000, even $50,000 gold by an exuberant few? Same for silver, $200, $400, $1,000. During all this time, gold has yet to hold above $1,230, silver above $18. There is a huge gap between current prices and unfulfilled pie-in-the-sky price projections and this has caused much disappointment, even delusion by some, because the sum of their purchases were often under water. As such, the situation being what it is for the PMs crowd, there are three simple choices available. Here they are and why they are.
The above edited excerpts, and those below, are from an article* by Michael Noonan (edgetraderplus.com) originally entitled Gold And Silver – Three Choices: Sell, Hold, Hold and Add. A Trading Treatise which can be read in its entirety HERE.
The 3 Simple Choices Available Are:
1. For those unhappy where the price for gold and silver are trading, sell, get out. Take a loss and move on and quit complaining. Life is too short.
2. You can hold what you have and remember the reasons for buying and accumulating either metal, or both. Attendant with the hold strategy is to keep on adding at these low prices, while recognizing that low can still go lower.
3. The reasons for buying have not changed. In fact, they have gotten worse, and the ultimate outcome is a virtual guarantee that prices will go higher. What has been so difficult for most is the no guarantee as to when.
The above gets into the context of our little commentary (in its entirety HERE) about adapting to market changes.
A Set of Rules are Necessary – Here’s Why
What everyone could benefit from is developing a set of rules for engaging in the markets because rules put a market into a defined context. They serve as a guide to becoming successful in trading. More importantly, having a defined and written set of rules will remove you from the emotional element of the markets few consider.
Markets Are Neutral!
All a market can do is generate information in the form of price and volume. That’s it! The markets are neutral, devoid of feeling. Does the market know or care what you buy/sell, when you buy/sell, and at what price? Absolutely not. You are the one that makes these determinations. Such decisions may result from the market information you see, but the decisions made are your own interpretations/perceptions and resulting beliefs about your expectations of what will develop and that is where dysfunctional emotions get attached. Any kind of emotional attachment is self-generating because the market is in control, you are not. That is where the necessity of having a clearly defined set of rules comes in (continue reading HERE).
Not every trade will necessarily result in a profit, but over a series of trades you will make money, guaranteed, if you have a defined set of rules that captures the full range of trading opportunities discussed in this article. Trading is a business and needs to be treated like one where you are the center of every decision.
Another Article by Michael Noonan:
Here’s the best reason to buy and hold gold and silver, at any price, and especially at these artificially suppressed prices.