Gold Bulls Are Misguided, Gold Bears are Getting Crazy

The bearish calls for gold and silver are getting more and more ridiculous the more it falls, while the past ones are validated... Well if gold $1400 was right then $1200 must be. Well if $1200 is here, then it will first go to $1000 then $800 then $600. And "Can't wait until silver is $5". On the other hand, the fact is, we still have not had the type of sentiment you would expect at a bottom either.

This type of ridiculous bearishness coupled with the bulls not figuring out yet either means we probably will stay quite range bound at some point for a significant period of time. I do have a feeling we will find the "low" of the range. The gold bulls have it all wrong on the REASON to own gold as money was FIAT since the 70s, the dollar declined 50% from 1987-1985 and the money supply tripled from 1980-2000 yet from then gold went into a major bear market Their wild stories scare the regular non paranoid person who does his research and sees the type of insanity in the market and calls for hyperinflation and just factually inaccurate statements. They end up preaching to the choir repeating their "facts" over and over again even as interest rates rise and gold falls.

I think the advantages of owning gold are more about correlation and a hedge against events that cause global political uncertainty. The gold-tlt-spy-cash portfolio has been proven to work with low volatility and higher returns in the past. You can substitute oil, or silver for gld and EEM for SPY and UUP for TLT or whatever and still see great results over time. This has been discussed and will continue to be mentioned for advantages of repetition. It's the low correlation that means one asset or the other is going to offer either a great buying or selling opportunity. Even if you can't learn to recognize them, merely by rebalancing high and/or low and selling and reducing the overall dollar amount of the shares that are high and increasing those that are low to maintain the same percentage holdings will work to benefit from all markets over time. Although such a strategy calls for "equal weighting" I would be more likely to call for weighting that adjusts according to outlook. This way you aren't "timing" the market, but are increasing position to accord with your outlook. I would have minimum limit of 10% in a portfolio of 4 and maximum of 40% with few (if any) exceptions. This way you have the wiggle room. Typically you should adjust according to performance relative to history. You can measure all the bull runs of the past and see where the average trough to peak run was. The "average" represents 25% invested the low represents 40% invested and a record high run-up represents 10% invested. This is just another of many ways to buy low and sell high. It is much better than completely liquidating (unless you are trading with tighter stops which should be separate from your investing account. As you learn to market time, you can shift your allocations slightly, while still protecting you against the possibility of being wrong.