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Can You Lose Money By Owning Gold?

Commodities / Gold & Silver 2009 Dec 08, 2009 - 02:54 AM GMT

By: Andrew_Abraham

Commodities

Can You Lose Money By owning Gold? So many gold bugs think this is absolutely impossible. However as a commodity trading advisor… I believe anything can happen and stick to a thought out plan. Let me give you an example, In the 1980s gold reached $1223 and investors were throwing money at gold. However almost 30 years have gone by and nada..I mean even in a savings account someone would have out performed gold. Do you prefer sleeping at night with your gold…are you sure the world will end? Should you blindly follow the hedge fund biggies…like John Paulson,Paul Tudor Jones and David Einhorn?


Will history repeat itself again? It is anyones guess. The difference however is when you invest with a plan…You will not have to wait 30 years to make any money. The same can be easily said about people who invest in the Stock Market blindly…again..anything can happen. It took approx 25 years for investors to get even after the Great Depression. I am not saying that will happen again..( remember anything can happen) but have a plan.

The fact is everyone has an opinion…The Central Bank of Korea came out with this statement “There’s an illusion in gold”? I am so glad they are so sure.More so they stated…“We follow the big trend. Gold isn’t the trend”. My simple question as a trend following commodity trading advisor…How do they know the future?

In my opinion…no one knows the future…The only thing I do know if gold continues to rise… Myself and the managers I have allocated to will follow the trend. If Gold starts to fall…I will exit the position…as well will they. More so to the discern of many a gold bug..Myself and my partners will SELL GOLD!

What a terrible thought for a gold bug. This is what a successful trend following commodity trading advisor does. No opinions.. just follow the trend…and eventually will stumble into some very profitable big trades ( rarely).

Bottom line… Yes you can lose money by owning gold…and guess what …You can lose your purchasing parity if gold rises…
So what do you do…follow trends…

Andrew Abraham
www.myinvestorsplace.com

Andrew Abraham has been in the financial arena since 1990. He is a commodity trading advisor and co manager of a Commodity Pool. Since 1993 Andrew has been a proponent of quantitative mechanical trading programs. Andrew's major concern is not only total return on investment but rather the amount of risk that one would have to tolerate in order to achieve returns He focuses on developing quant models that encompass strict risk adherence and correlation. He has been a speaker at conferences as well as an author of numerous articles. Andrew has spent years researching ideas that have the potential to outperform indices as well as maintain fewer draw downs.

Visit Angus Jackson Partners (http://www.angusjacksonpartners.com) Contact: A.Abraham@AngusJackson.com (mailto:A.Abraham@AngusJackson.com)

© 2009 Copyright Andrew Abraham - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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