Here's a very brief note on a very risky way to hype gold's amazing run.
Some traders think hopping in and out of asset classes builds wealth. Some even think doing such a thing regularly will somehow beat the overall market. I tip my hat to Global Guerrillas for that link.
Following the lead of prop traders who only tip part of their hand to the public is not a good way either to keep up with said trader or beat Mr. Market at his own game. Gold has risen strongly thanks to the Fed's ZIRP efforts at keeping the dollar weak and thus less attractive than gold as a store of value. Anything that happens to drive up U.S. interest rates- an international run on the dollar, new Fed policies to fight price inflation, and the like - will hit gold pretty hard. Unexpected stuff like that will turn any prop trading, herd following strategy into a nightmare.
I've been slowly unwinding my long positions in GDX as gold has stayed strong. Nothing lasts forever.
Full disclosure: Long GDX with covered calls.
Some traders think hopping in and out of asset classes builds wealth. Some even think doing such a thing regularly will somehow beat the overall market. I tip my hat to Global Guerrillas for that link.
Following the lead of prop traders who only tip part of their hand to the public is not a good way either to keep up with said trader or beat Mr. Market at his own game. Gold has risen strongly thanks to the Fed's ZIRP efforts at keeping the dollar weak and thus less attractive than gold as a store of value. Anything that happens to drive up U.S. interest rates- an international run on the dollar, new Fed policies to fight price inflation, and the like - will hit gold pretty hard. Unexpected stuff like that will turn any prop trading, herd following strategy into a nightmare.
I've been slowly unwinding my long positions in GDX as gold has stayed strong. Nothing lasts forever.
Full disclosure: Long GDX with covered calls.
