Monday 23 December 2013

Decision time?

My gold investing hasn't gone too well so far!
I think I need to remind myself why I have been buying the stuff. Either my reasoning will still feel valid and stop that dull pain I get when I remember I own this plummeting-priced asset... or I it will appear wrong-headed and I will need to re-evaluate what I am doing.



One of my reasons for buying gold was the possibility that it could rise in value if my income and my home fall in value. An attempt, I suppose, to turn my job, home and investments into an 'absolute return' fund - which sounds horrible and ambitious at the same time.


I didn't think of doing this until things were bad which meant I bought gold when everyone else was worried about the same thing. So it was expensive. Now people seem to be less worried and the price has fallen.

On this front the questions I ask myself are whether: 

1. Will gold act as an insurance in bad times? My understanding is that hedging of any kind is very difficult and hedges are one/two dimensional while liabilities are three/four dimensional. Whether gold will perform as a hedge against property prices and job insecurity and inflation in London will depend on how gold is used by other investors, how they see it - and there are lots of reasons why investors might not see it in the same light that once they did: http://www.metal.com/newscontent/55937_will-gold-bounce-back-in-2014. But I suspect that even if I had only the purest unadulterated facts before me, the answers to these questions would not be clear.

Where does this leave me on the action front? I am a slow mover - as can be seen by my efforts on this blog - I miss boats and bandwagons. The slowness is unlikely to change which, I think, is why I need to be wary of accepting a falling price as a prevailing view on gold and sell. I will be forever behind the curve. But if I wait and see if the price recovers, what is my justification? Do I believe it will recover quicker than other assets? No, I just think I will never be able to answer those questions without having to rely on a whole new set of narratives, analysts, commentators, products and judgements. I think I would rather stay and watch the carnage here and hopefully learn from it (I think I want to buy some more soon - which makes me think I must have got a mental problem! But I think that was always my position I just hadn't realised it - that I would stay and watch this whether the price fell or rose? It looks like it.)    

2. Should I be trading it to soften the price falls? I don't think I have the time, energy or desire to trade on a daily basis. If the time comes when I think I understand a situation I might do something like trade but at the moment I only get that desire to trade when things look bad, which is probably not a good time to do anything rash. Also trading removes the hedge.
From what I've seen, trading requires a different kind of knowledge. It is a more coal-face activity which revolves around finding acceptable answers/justifications for short-term activity. But having said this I don't invest a regular amount at a regular time so may be I trade anyway. I just take a look and if I have some money, and I feel it's not a very bad moment, I put the money in. May be I should do it more mechanically.

3.  Is wanting to know about gold a reason to invest? I used to write about it and I found it interesting on several levels. But I don't write so often but I am still interested. I thought owning some would help me pay attention. It did for a while, but my eyes got a lot bigger than my stomach! If I didn't know what to do I put £250 ('free of charge') into BlackRock Gold and General and my holding in this fund grew disproportionately. It is now the hardest hit of my holdings. 

I also bought a very few Personal Assets Trusts shares. This was an attempt to diversify. I also think it remains faintly true to my interest in gold but more defensively - its manager Sebastian Lyon does still rate gold as a longterm bet.

Having written this I feel a little less worried. People are behaving as if the danger has passed and I don't feel it yet. I've lost a lot but I think I'm prepared to lose more because, even if everyone else is right to ditch gold, I don't think I'll lose out by sticking to building an understanding of a defensive or hedging position (one based around understanding gold). Perhaps the only consolation will be that it will be cheaper to experiment from now on!

17 comments:

  1. Interested in a link exchange from http://goldiscashtoday.com/

    Hi,

    I am the owner of the Gold Is Cash Today website and I really like your website.
    Like Gold ETF Investor, we also provide readers with great information about topics such as gold and silver investing.
    If you would like to exchange links, we would be happy to do so.

    Please let me know if this is something you would be interested in by using the contact page on our website.

    Best regards
    Vegard Hanssen
    Webmaster at http://GoldIsCashToday.com

    ReplyDelete
  2. The Production system of prodigy oil and gas got worlds most effective and financially profitable methods and best of these methods are Horizontal Oil Drilling process and Water flooding method.

    ReplyDelete
  3. I really enjoyed and benefited from your blog.
    Thank you for sharing your knowledge.

    Best exchange traded funds (ETFs) to buy

    ReplyDelete
  4. Really this is good blog sharing with us. Thanks lot.Examhelpline.in

    ReplyDelete
  5. Appreciating the time and energy you put into your blog and detailed information you provide. It's awesome to come across a blog every once in a while that isn't the same outdated rehashed material. Wonderful read! I've saved your site and I'm including your RSS feeds to my Google account. etf japan

    ReplyDelete
  6. I want to point out my love for your kindness supporting all those that really want help on that issue. Your real commitment to passing the message up and down appeared to be surprisingly helpful and have regularly permitted regular people much like me to get to their goals. Your entire insightful suggestions entails a lot to me and still more to my mates. Warm regards; from all of us.
    I and my pals have been checking out the excellent points located on the website while immediately got a terrible suspicion I had not thanked the web site owner for them. Those guys had been warmed to read them and have honestly been taking pleasure in these things. Appreciation for truly being simply accommodating and for making a decision on this form of incredible themes millions of individuals are really desperate to understand about. My personal sincere apologies for not saying thanks to you earlier. China Fonds

    ReplyDelete
  7. Nice post, thanks for sharing hope to see more in future.
    UAE Cabinet Approval–No VAT Charges on Gold

    ReplyDelete
  8. Permit me to introduce you to LE-MERIDIAN FUNDING SERVICES. We are directly into pure loan and project(s) financing in terms of investment. We provide financing solutions to private/companies seeking access to funds in the capital markets i.e. oil and gas, real estate, renewable energy, Pharmaceuticals, Health Care, transportation, construction, hotels and etc. We can finance up to the amount of $900,000,000.000 (Nine Hundred Million Dollars) in any region of the world as long as our 1.9% ROI can be guaranteed on the projects.
    Le-Meridian Funding Service.
    (60 Piccadilly, Mayfair, London W1J 0BH, UK) Email Contact Info...lfdsloans@lemeridianfds.com

    ReplyDelete
  9. Kaufman's Adaptive Moving Average (KAMA) Usage and Signals
    Chartists can use KAMA like any other trend following indicator, such as a moving average. Chartists can look for price crosses, directional changes, and filtered forex trading signals .
    First, a cross above or below KAMA indicates directional changes in prices. As with any moving average, a simple crossover system will generate lots of forex trading signals and lots of whipsaws. Chartists can reduce whipsaws by applying a price or time filter to the crossovers. One might require price to hold the cross for a set number of days or require the cross to exceed KAMA by a set percentage.

    Second, chartists can use the direction of KAMA to define the overall trend for a security. This may require a parameter adjustment to smooth the indicator further. Chartists can change the middle parameter, which is the fastest EMA constant, to smooth KAMA and look for directional changes. The trend is down as long as KAMA is falling and forging lower lows. The trend is up as long as KAMA is rising and forging higher highs. The Kroger example below shows KAMA(10,5,30) with a steep uptrend from December to March and a less-steep uptrend from May to August.

    And finally, chartists can combine signals and techniques. Chartists can use a longer-term KAMA to define the bigger trend and a shorter-term KAMA for forex trading signals . For example, KAMA (10,5,30) could be used as a trend filter and be deemed bullish when rising. Once bullish, chartists could then look for bullish crosses when price moves above KAMA (10,2,30). The example below shows MMM with a rising long-term KAMA and bullish crosses in December, January, and February. Long-term KAMA turned down in April and there were bearish crosses in May, June, and July.

    free forex signals is Opportunity Trading alerts to trade on a currency pair or gold at Exact entry point , take profit and stop loss levels
    forex signals send via email,SMS and on website https://www.freeforex-signals.com/

    ReplyDelete
  10. Thanks for sharing this amazing and interesting blog. I really Like your Blogs Also you share many unique images which explain many things. Here I want to share a Fishing Forum Site. Because Many people want to share their thought, guides and Tips etc. now a days i work for The Dow Jones Industrial Average, not to be confused with the Dow Jones Transportation index (which was the first index), is often called, "the Dow" or indexsp: .inxc and consists of thirty stocks which traditionally were industrial-based. But in recent years as the US economy has become more consumer-oriented, the index has seen a change in composition that no longer has much to do with direct industrial investment.

    ReplyDelete
  11. so the new invention true classic 123 movies was inevitable, practically human nature, that animation grew in tandem with cinema from the beginning. And it was only inevitable in the Internet age that someone, somewhere would give 123 movies hd trueclassics reviews all the best feature-length animated films from the 20th century and beyond, rank them, and call the guide something like the 140 Essential Animated Movies Ever to Watch Right Now! Which is what you’ll find b

    ReplyDelete
  12. The Le_Meridian Funding Service went above and beyond their requirements to assist me with my loan which i used expand my pharmacy business,They were friendly, professional, and absolute gems to work with.I will recommend  anyone looking for loan to contact. Email..lfdsloans@lemeridianfds.com  Or lfdsloans@outlook.com.WhatsApp ... + 19893943740.

    ReplyDelete
  13. I am browsing this site daily and get nice facts from here all the time.

    ReplyDelete
  14. Best etf investing Wow, cool post. I'd like to write like this too - taking time and real hard work to make a great article... but I put things off too much and never seem to get started. Thanks though.

    ReplyDelete
  15. Who is Kieran Lewis I think this is an informative post and it is very useful and knowledgeable. therefore, I would like to thank you for the efforts you have made in writing this article.

    ReplyDelete