Buy-and-hold gold and silver and [the stocks and long-term warrants of quality] precious metals miners – and sleep well at night. [Let me explain why that is the case.] Words: 731
So says Jeff Nielson (www.bullionbullscanada.com) in edited excerpts from his original article* which Lorimer Wilson, editor of www.munKNEE.com (It’s all about Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. Nielson goes on to say:
Understanding ‘Buy and Hold’
While short-term movements are highly unpredictable and short-term predictions are extremely unreliable, this pattern reverses over the long term. Put simply, the longer the time horizon (and the larger the data stream) the more predictable are the movements of companies, commodities, and overall markets. This is an elementary fact of statistics… [As such,] given this context, what are investors to make of the “new reality” for portfolio management where even the most-conservative portfolio managers are regularly heard pontificating that “buy and hold is dead”? Very simply, it means that these “advisors” no longer have confidence in the investments they are recommending to their clients.
In contrast, I know of no precious metals advocates who have any reluctance to recommend gold and silver as being good long-term investments – and by “coincidence” many of the “experts” who previously shunned precious metals are now conceding that every portfolio should have at least some precious metals component.
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The other reason why making short-term “calls” on gold and silver is even more dubious than in other sectors is because these are our most-manipulated markets. The reason for this constant manipulation is also part of the reason why gold and silver are considered such good long-term investments. Precious metals are the truest “barometers” for economic conditions, and most particularly inflation. As the only true “money” in our societies, the nominal prices of these commodities will always reflect the level of inflation in an economy, over the long-term. Lying about inflation is a goal of most governments, and an obsession with some – most particularly [that of] the United States. Part of this campaign of lies is to suppress the prices of gold and silver – so that soaring gold and silver prices do not reveal the magnitude of their lies regarding inflation.
The precise reason why predictions are so unreliable over the short-term (constant manipulation) is also the reason why there is so much certainty about the long-term predictions for this sector: the longer a price/market is held down, the longer and higher it will bounce once such price-fixing inevitably fails. This is why it is so vitally important that precious metals investors acquire the most-elusive of all qualities: patience…
No one knows what precious metals markets are going to do over any short-term span…[but] there are occasions where sharp spikes or dips create obvious buying and selling opportunities. As such, placing open buy and sell orders still allows people to take advantage of those extremes – and without risking getting swayed in their tactics by the emotions which dominate short-term trading. In other words, let the market come to you.
Reckless money-creation, and even more ridiculous near-zero interest rates, guarantee [that] a wave of inflation will impact the global economy. The real beginning of the “big move” for precious metals is still ahead of us because government policies continue to make the long-term fundamentals for this sector even more bullish. Maybe that big move will start tomorrow, [maybe not, but] the point to keep in mind is that if precious metals were to trade sideways again, or even pull-back, this makes the long-term picture more bullish, not less so.
- Update: Why $300+ Silver is a Realistic Future Peak Price http://www.munknee.com/2011/07/with-gold-at-10000-silver-could-reach-714/
- Update: These 90 Analysts Believe Gold Will Go to $5,000/ozt. – or More! http://www.munknee.com/2011/06/update-these-90-analysts-believe-gold-will-go-to-5000ozt-or-more/
- The “Secret” World of Gold & Silver Company Warrants http://www.munknee.com/2011/05/the-secret-world-of-gold-silver-company-warrants/
- Gold Mining Stocks Are CHEAP Compared to Price of Gold http://www.munknee.com/2011/06/gold-mining-stocks-are-cheap-compared-to-price-of-gold/
– The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
– Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above