Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy Government PANICs! Sterling Collapses! - 19th Mar 20
Coronavirus Market Crisis - Nowhere to Hide! - 19th Mar 20
Coronavirus Most Likely GDP Economic Outcome for Q1 and Q2 2020 - 19th Mar 20
How COVID-19 Leads to 2008-Style Bank Crisis - 19th Mar 20
Coronavirus Impact on Global Economic GDP Numbers - 19th Mar 20
Bticoin Crash Big Channel Review - 19th Mar 20
Gold is Doing Its Job…Silver Will Come Back as a Safe-Haven Asset - 19th Mar 20
The Chartology of Coronavirus Deflationary Event - 18th Mar 20
Fed Slashes Rates to Zero and Introduces QE in Response to COVID-19. Will Gold Rally Now? - 18th Mar 20
Coronavirus - Nothing to Fear but Fear Itself - 18th Mar 20
The Stocks Bear Market Is Upon Us... Or Not - 18th Mar 20
US and UK Coronavirus Containment Incompetence Resulting Catastrophic Trend Trajectories - 17th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Your Gold and Silver Game Plan Going Forward

Commodities / Gold and Silver 2010 Sep 15, 2010 - 02:43 AM GMT

By: Jordan_Roy_Byrne

Commodities

In our last commentary we quickly covered the current outlook of Gold, Silver, the mining shares and the juniors. The breakout in the sector continued today as Gold reached a new high and the mining shares (as per the HUI or GDX) closed near a nine or ten month high. The juniors (GDXJ) and Silver continued higher. Most important, both GDX and GDXJ gapped higher and made strong closes and on large volume. Everything is on track and there is little reason to think otherwise.


However, to keep things on track one should have a plan.

First of all, one needs to have separate thinking when it comes to the metals and the shares. Buying coins or bullion should be viewed more as insurance than an investment. For the newbies who have yet to accumulate or are just getting started, consider a dollar-cost averaging type program. Whether you use GoldMoney.com, Bullion Vault or someone else, take as little as $100-$200 per month and begin accumulating physical. This is an easy but effective way to build your insurance position.

Trading, speculating or investing in the shares is not a form of an investment and not insurance. Gold holds its value over time, but the gold shares do not. We buy these stocks in order to sell them one day. Even in a bull market, mining shares fall 20%-30% in a routine correction. Thus, when dealing in the shares, one needs to take a more active approach when managing their portfolio.

A mining stock portfolio should be comprised of core positions, established junior miners and perhaps a few speculative positions. The balance of the portfolio is up to you. If you want less risk than you would weight your portfolio in core positions and established juniors. If you want more risk then you could weight your portfolio in the established juniors with some speculative positions.

For “core positions” we prefer funds or ETFs rather than large-cap stocks, which tend to lag the metals over time. In other words, instead of going with a basket of large caps, we’d consider using GDXJ (the juniors ETF) or TGDLX (Tocqueville Gold Fund).  Both have outperformed the GDX over time and each holds many stocks, which reduces the risk associated with holding an individual mining company. If you want less risk then you can opt for GDX. For those getting their feet wet in this bull market, we’d recommend starting with one of the aforementioned three (GDX, GDXJ, TGLDX).

When considering juniors, we need to define the size of these companies. In our opinion, a development company or producer with a market cap near or exceeding $1 Billion is not a junior. Conversely, a company with a market cap of less than $150 million may be too small to be a viable junior. We prefer companies that fall in the middle of that range and have the ability to become $1 Billion in market cap and/or would be a strong takeover candidate. For those with knowledge of the precious metals markets, the juniors may be the largest portion of your portfolio. We orient our service most towards this segment.     

Presently, we would weight the junior portfolio more in Silver than Gold. In recent weeks we’ve written about the better values in this patch and currently we have more recommendations on silver juniors than gold juniors.

Finally, the speculative portion of the portfolio, (which should be nil unless you are an expert in this space) should focus on special situations which have home run potential. This also includes warrants. Why dabble in tiny companies to only make 50%? These are the stocks with at least five-fold potential in the next 12 months. Sometime down the road, this segment of the market will go crazy. For the time being, dabble in only the legitimate of the tiny juniors.

If you are interested in receiving professional guidance in navigating this bull market and finding the best and most reliable juniors, then consider a free 14-day trial to our service. Precious metals are running now, but it is a long road ahead. Proper guidance, risk management and a plan for your portfolio are all essential to making money and keeping it.  

Good luck ahead!

Jordan Roy-Byrne, CMT

Jordan@thedailygold.com
http://www.thedailygold.com/newsletter

Trendsman” is an affiliate member of the Market Technicians Association (MTA) and is enrolled in their CMT Program, which certifies professionals in the field of technical analysis. He will be taking the final exam in Spring 07. Trendsman focuses on technical analysis but analyzes fundamentals and investor psychology in tandem with the charts. He credits his success to an immense love of the markets and an insatiable thirst for knowledge and profits.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules