Gold and the Recent Correction
By: John Fisher
I found these charts from Casey Research that shed some light on the future direction of the market. From Casey Research, “If you’re bullish about the long term for gold and silver, it’s mouthwatering to watch them undergo a major correction after taking earlier profits that added to your deployable cash.”
For a little historical perspective on pullbacks, consider the following charts:
The current 15.6% gold decline, while considered a “major” correction, is not out of the ordinary, particularly following the late summer spike. And after each big sell-off, there was a price consolidation phase that in every instance led to higher prices.
The message: “Hold on, and buy the big dips.”
All Things Considered – John’s Commentary
Successful investing, as with many things, is counter-intuitive. People become reticent to buy on a dip for fear prices might go lower. They buy on the “highs” based on greed that prices will go higher.
Follow the Warren Buffet philosophy whereby he states, “I get scared when people get greedy, and I get greedy when people get scared.”
Quote of the day: “The fate of the nation and the fate of the currency are one and the same.” – Dr. Franz Pick
