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The Big Investing Lesson You Must Learn From Gold Today

Commodities / Gold and Silver 2013 Jun 28, 2013 - 04:52 AM GMT

By: DailyWealth

Commodities

Dr. Steve Sjuggerud writes: "I sold my gold," a family member told me a couple weeks ago.

"We probably sold at the bottom," he told me. "But we sold."

He was dejected when he told me this... as if he should have sold closer to the peak in gold. But who knows when the peak is?


I was proud of him... He limited his loss. That is the right thing to do... especially since he is retired.

So far, selling back then looks like a brilliant move... Gold has been in free fall in recent weeks. It's down from $1,400 an ounce in early June to $1,275 an ounce today.

These days, when I see the price of gold, I remind myself of this life-changing investing quote from legendary investor Jim Rogers: Markets often rise higher than you think is possible... and fall lower than you can possibly imagine.

When I first read that in the book Market Wizards over 20 years ago, I didn't believe it. I didn't get it. But since then, it's proven to be right over, and over, and over again...

And I always keep that quote in mind...

That's why I sold gold much earlier than my family member. In my True Wealth Systems letter, we sold our two remaining gold plays on January 2. We were down 2% and 7%, respectively. I didn't want to sell... but I had to...

When we sold those two positions in True Wealth Systems, I was dejected like my family member was... Even though I know losing small battles is part of winning the war, I hate it when my readers take a loss from following my advice.

And in my True Wealth letter, we don't own any gold stocks or funds, or even any gold bullion. (All we have is one semi-rare gold coin.)

We sold our last gold stock in True Wealth months ago – we hit our trailing stop on it. Again, I hated taking a small loss... In hindsight, cutting those losses early is the best thing we could have done.

I personally believe that gold stocks are ridiculously cheap... But I have been patient...

Gold stocks have been in free-fall. But I haven't tried to catch that falling knife. I hear Jim Rogers' voice in my head... and I sit on my hands. Markets often rise higher than you think is possible... and fall lower than you can possibly imagine.

The big lesson today from gold is that Jim Rogers' advice from 20 years ago was exactly right.

Don't ever forget it – for gold or anything else – and don't ever catch yourself saying "but it can't fall any more..."

It can...

I very much look forward to buying gold and gold stocks again... some day... once the carnage is over. But that day isn't here yet.

Good investing,

Steve

Editor's note: Jeff Clark also shared his take on the gold-stock sector this morning. He agrees with Steve that more downside is possible. But he's watching out for a "violent rally" sometime in the next few months. Read his full argument in Growth Stock Wire right here.

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2013 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

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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