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Tuesday, August 31, 2010

Historical note

Back on July 30th, 2009, I became concerned over market decline, and flipped from long positions, including some gold miners, to cash and/or some shorts.

It was a disastrous move. The S&P 500 was at 1,000 at that time, and the market continued to rally to 1,220. Today the markets are poised to retest the 1,040 level, and there is a chance it breaks down back to 1,000.

Amazing, its over a year later, and the market has not gained significant ground in over a year. For those with retirement nest eggs, this economy is broken. The leaders refuse to lead and instead play paper games. I really doubt we will see any significant market gains for 5 to 15 years to come.

The ONLY outlet possibility is the USD breaks down, and market can go higher, but what our cash can buy would be less internationally.

Back in July 30, 2009, SPX was about 990, GDX was at 37, GLD was at about 95.
Today August 31, 2010, SPX at about 1,048, GDX is at 53, GLD at 121.

While gold can have a major correction, it has been holding up nicely. By no means is past experience a guarantee of future returns, but it's nice to see that it has had strength while majority has weakness.

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