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Strategies & Market Trends : Value Investing

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To: Mr.Gogo who wrote (42356)	4/24/2011 7:24:49 PM
From: Madharry	Read Replies (1) of 78523

this represents about a 5% portfolio position. my guess is that they anticipate holding that % more or less intheir portfolio and will most likely rebalance periodically. To me it means that there are new increased long term demand for gold, and now possibly silver. I love how all the people who didnt think it was worth buying at $600 are so quick to offer an opinion that its time to be cautions now that its above $1500. I dont think anyone is qualified to offer what will be an equilibrium level for either gold or silver at this point. I can only tell you that I had an opportunity to purchase some silver bullion at slightly below spot rates recently, mentioned it to a few of my friends. No one showed the least bit of interest in it. My wife asked me why I was buying it as well. She was only slightly mollified when I told her that I was already making a profit on it. If I get all I ve requested it will be about 100 ounces. so we werent talking real big numbers here. I think that when interest rates start to rise even more people will switch some of their portfolio to gold and silver. especially the baby boomer generation who have most of their future income stream as some combination of bonds, social security and fixed annuities, in other words very little protectoin from either inflaton or dollar devaluation. most of the retirement literature that ive read seem more concerned about recurrence of a severe dollar decline than inflation and dollar decline. Now I see people are retiring at 65 and they can expect to look forward to 25 years of inflation and dollar declines so how does a portfolio of 65% dollar denominated bonds and 35% stocks help them? even if you own your own house you still need to pay all sorts of variable costs that keep rising with inflation unless you happen to live in an area that fixes property taxes at a certain age.

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