Today mark's the first time in 47 years that the Green Bay Packers play the Dallas Cowboys at Lambeau Field. The last time these two teams played in Green Bay during the playoffs, the game was labeled The Ice Bowl, so fittingly this game is being billed The Ice Bowl 2. However, the temperatures today will not be near as cold as they were 47 years ago. Temperatures today in Green Bay should be around 20 degrees Fahrenheit with wind chills around 0, and in 1967 those were -13 and -50, respectively.
As for the current gold prices the temperatures couldn't be any colder the last 3+ years. Based on some insightful feedback from my last post, I wanted to clarify my stance on this current bear market correction in gold and silver. My recommendation to start or continue accumulating precious metals hasn't changed. Simply because lower prices and negative sentiment don't last forever. In fact, environments like this can present significant buying opportunities. History in gold prices prove that statement to be true.
Why is the price of gold today over $1200 for per ounce compared to 47 years ago when it was less than $50 per ounce? Much like a ticket for an NFL playoff game, the prices have changed dramatically. The price of an Ice Bowl ticket in 1967 was around $10. That same ticket would cost roughly $130 at face value, and likely it would have an additional retail cost because of third party sales distribution (which is a very good comparison to how my 1-5% cost markup works on gold and silver). So the price of the playoff ticket is more than 13 times expensive today than 47 years ago, and the price of gold is more than 20 times expensive today. Why does this matter to you?
It all goes back to my reasons for cost averaging your purchases, or buying at a time you feel comfortable if you plan to go "long" with your investment. For someone planning to hold onto their gold or silver for 5, 10, 20, or 30 years this current price level may be the best buying opportunity since the year 2000.
In contrast, I tend to think the current price level will see lower low's in 2015 before hitting what I believe is the bottom and the next big phase up in the bull market begins. I firmly believe gold and silver present the best (albeit risky) investment opportunity over the next 30 years compared to most any other asset. The long term sentiment and fundamentals haven't changed, and a 3-5 year downturn in prices during a bull market is not a very long time. Remember, this bull market in precious metals only started a short 15 years ago. The bull market in stocks from the 1970's to 2007 lasted over 35 years! Some would argue it's still continuing today. Similarly, someone who purchased gold in 1967 and still owned it today would have seen significant gains on their investment, despite the constant fluctuations in the price. If you have a good financial adviser, they will explain the average yearly increase over that time, and that timing your investments and cost averaging are ways to minimize that risk. That is why mutual funds became so popular, because money managers knew that fact and could help people spread risk, diversify stocks, and cost average their gains/losses. So that is why I write these posts, in hopes that you will remember my advice when you decide to finally take the plunge in precious metals.
So a bear market correction like this, where gold prices were beaten and battered for 3+ years, is a perfect time to start accumulating larger holdings. The sentiment against precious metals have even pushed some of the most loyal gold bugs to think that this is the end for gold. To me, unless you want low interest guaranteed returns (which if you do please call and I can provide some options for you), this is the absolute best time to start thinking about investing in precious metals. We may see $1000 gold or lower in the next few months, nobody really knows, or we might see the next phase of the current 15+ year bull market begin. If you don't want to be on the sidelines, call me when you are ready (920) 819-6921. Even if you only feel comfortable starting with a coin or two of silver, please call me to discuss your situation. Like I always say, keep 5-10% of your overall investments in gold and silver bullion, and if you are younger and have a higher risk tolerance consider buying more than that and/or buying gold mining stocks. As always, God Bless and Keep the Faith. Oh, and Go Pack Go!
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