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If you believe gold and silver are too
“expensive” to buy at these prices, then this article is for
you. Even with nearly 100 years of massive dollar devaluation by the US
Federal Reserve, more than 700 years of fiat currencies with multiple
instances of total fiat currency collapse in China, France, Germany, Zimbabwe
et al, and nearly 6,000 years of gold as a stable currency, massive
misunderstandings about the price of gold and silver still amazingly exist.
For example, just because gold has risen from $250 to $1,600 a troy ounce and
silver from $4 to more than $40 a troy ounce within the last decade, there
are still millions of people waiting on the sidelines to buy their first oz.
of physical gold and physical silver because of their belief that gold and
silver are “expensive.”
In early 2006, when gold was trading at $580 and silver
was trading at $11, I told anyone that would listen to me that in a few years
they would look back at those prices and marvel in amazement at how cheap
those prices were. This despite the fact that the miseducated
financial media was touting those very prices as “very expensive”
back then as well. As sure as I was back then of my prediction coming
true, I am equally sure today that in a few years, people will look back on
the price of gold at $1,600 and silver at $40 and marvel at how cheap these
prices were as well. This doesn’t necessarily mean go out and
chase gold at $1,620 right now because I do believe a pullback from this
level is in order very soon. However, from the very first day I launched my
Crisis Investment Opportunities newsletter on June 15, 2007 until this year
in 2011, due to my strong conviction in the continuing upward trend in gold
and silver, I have heavily concentrated my CIO newsletter portfolio in gold
and silver assets. For this reason, my CIO newsletter has outperformed the
major US, UK and Australian stock market indexes all by well over 200% during
this time period.
To understand why the best-in-class gold and silver stocks
are still highly undervalued even as of today, please read this recently
scripted article titled, “Why it’s Still Buying Season for Gold and Silver
Mining Stocks”. A lot of investors shy away from
buying gold and silver mining stocks and from buying physical gold and
physical silver because of the annual volatility experienced by these assets.
However, in the more than four years that I have been publishing my
investment newsletter, I have always considered the right precious metal
investments to be a low-risk, high-reward proposition. To illustrate this
point, were I taking excessive risk over the years in my investment
newsletter, I should have experienced massive losses in 2008, a year when
most major global stock markets lost about 40% across the board. Instead, I
was still able to return a slightly positive return in my Crisis Investment
Opportunities newsletter in 2008. This would not have been possible had I
constructed my newsletter’s portfolio with high-risk, high-reward
assets. Unfortunately, most investors very erroneously believe that high
volatility equals high risk. This is not true and has never been true.
In this article I wrote nearly five years ago titled, “Volatility in Your Portfolio Does NOT Equal Risk”,
I explained why so many people misunderstand the role of volatility in their
portfolio.
J.S. Kim
SmartKnowledgeU
JS Kim is the Managing Director and
Founder of SmartKnowledgeU, a fiercely independent investment
consulting and research firm that devises investment strategies to protect
Main Street from the fraud of Wall Street.
Article originally published
on SmartknowledgeU here
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