Posted December 13, 2010 at 10:01 pm
by Barry Goss:
Whether this is a sign of the times — whereby more and more average, everyday Joes and Janes jump on board the “gotta have gold” dominant social theme (a start of the mania phase, anyone?) — or just over-the-top, fear-driven marketing in action… I won’t judge or predict.
What I will say about the latter, however, is this:
If we could predict with certainty the ultimate destruction of any trading vehicle (including currency itself), we wouldn’t be trading (or investing)… we’d be in Vegas.
Unfortunately (for the susceptible, impressionable and uninitiated, anyway), when a fast-talking, swift-moving group of marketers suddenly jumps on an IDEA — a “thing” that they see as being new or extra-revealing — they tend to speak with a black-and-white tongue.
The happy medium — the grey-area thinking — is rarely expounded on or tossed around.
Here’s the deal:
We also adore GOLD (I last talked about that via our “The 9-Year Gold Bull” post ).
Yes, we get the background and history lesson too:
Gold, for thousands of years, has been the world’s only truly secure investment. It’s called the money of monarchs for a reason. It’s easily portable (when divisible in coin form), cherished, durable and backed by nature (rooted in its crust) in limited quantity (a good thing). Most importantly, it’s no one else’s liability.
But, in our pitch for owning the Midas Metal, this is where we typically stop. You’re not going to get any solemn Nostradamus-like “you-better-own-it-or-else” scare tactics from us.
We might simply end the appeal for buying it selectively, and keeping maybe 20% of your portfolio held in gold-backed assets, by saying that it’s a great insurance policy against government incompetency and stupidity.
Yes, gold in all its forms is a beautiful thing to own. But then we move on to the current reality at hand:
Making, managing, and multiplying “fiat” currency. In our case, ‘GROWING’ our dollars.
After all, those digits that show up in your bank and brokerage accounts are what they are. You can either fall for the “demise of the dollar” run-for-the-hills (and take your MREs — Meals-Ready-To-Eat — cans with you)… or… you can work with the current system you’re in.
Which means, whether you like it or not, employing a larger percentage of your available “investable cash” in assets that TRADE — usually those can be bought and sold via a public exchange (or sometimes privately).
And, one of the best ways we know to do this is to get to know ‘smarter’ people than us… namely fund managers and traders who are more consumed (and intelligent) than we are.
We use MANAGED trading-based accounts, in other words, to accomplish this.
The bottom line is: The dollar is still the world’s reserve currency. And, as of this moment (or any foreseeable near-future moment), there’s nothing of super value to put in its place. There are no better solutions (unless the entire world is willing to have gold-backed currencies).
Control what you can, focus on what you’re dealing with, and learn to PROFIT from current reality.