SINLetter
stock contest is over. The result? 1st place! Our
picks end with a Q1 gain of 21.52% (86% annualized). All picks were made using
our proven method of technical
analysis. Give our TA
onDemand a try for an unbiased technical view of
stocks, markets, commodities and currencies.
Gold
and silver are precious metals that have monetary value and can
shine in an economic contraction. Copper, zinc and nickel are base
metals that have a positive correlation to the economy. Uranium is
an important source of alternative energy that will be needed due
to developing economies like China and India. Global stock markets
are increasingly connected and tend
to rise in bull markets and fall in
bear markets together. This is magnified by communications
technology which makes market news readily available in real time. Currently, in late
2007, major worries are evident in the credit markets with a focus
on cdo, subprime and other mortgage and bond markets. Rising
credit spreads and a rising yield curve are signs of this trouble.
Again, gold, silver, uranium and oil, along with base metals are
vital hard assets and resources (in a world full of bonds, stocks
and various leveraged paper) with gold (and sometimes silver) also
receiving a monetary bid. Gold is a safe haven and we believe it
belongs in any portfolio that is geared toward risk
management. ETF's such as GLD, IAU and SLV and dealers such
BullionVault offer convenient access to the gold bullion market.
As the bull
market ended in 2000 and a cyclical bear market began, it became
apparent that secular changes were at hand. No longer were stocks the only
asset class to own. In fact, to this point in 2007 a wide range of
commodities have out-performed stocks. Commodities like uranium, oil,
natural gas, copper, nickel and agricultural commodities like corn, grains
and coffee. With the industrialization of China, India and other
developing nations,
resources and commodities of all kinds have been in high demand. Silver is
unique in that it is considered money by many but also has productive
commodity characteristics.
Gold,
while having value in jewelry and some industrial applications trades as
if it were money. It especially trades this way in times of
financial system stress. Gold is undervalued after a 20 year long
bear market and now a 7 year bull market. Most people still do not
seriously consider gold as anything but a 'barbarous relic'. This is
curious at a time when global currencies like the us dollar, euro,
yen, Canadian & Australian dollars are being inflated and
devalued. Even the Swiss franc is not what it used to be.
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