Archive for May 12th, 2011

Put Gold in that thar Portfolio

Thursday, May 12th, 2011

Gold has been the lingua franca of investment of the wealthy throughout history. The yellow shine of the soft pliable metal remains highly attractive to many investors today. Gold is arguably the most popular precious metals bar none. Using successful trading systems can build your wealth. Instruments like gold can help to sustain your reserves. Whether you are trading commodities, e-minis, S&P500, currencies or trading futures. It is wise to diversify your portfolio.
Why is gold attractive? Gold is a tangible asset that retains its value even if fiat currencies,stocks, bonds, eminis or futures lose value, Gold is a highly liquid asset. In certain conditions more liquid than currency. Gold is a way of riding through the crests and troughs of world economies. Many feel that gold is the only real hedge against the pervasive financial shenanigans that rock the economics of the western world. In summary, gold is portable, liquid, fungible, portable, and readily exchanged anywhere in the world.
So you think your interested in gold… You need to be clear as to your investment objectives. Face it, Gold is expensive. Keeping it in safe storage provides it’s own set of challenges.
If you have financial wolves howling at your door, gold probably should not be your first priority. First clear some of those existing debts. Eliminating debt returns a higher yield than many investments. Just do the math.
It is conventional wisdom that once you have cleared your debt and have money to invest, traditional investments in stocks and bonds are the first place to look as in the past they tend to outperform gold over the long-term. At Shadowtraders we would argue that a bit of trading in the futures market is a viable way to build your portfolio. In today’s uncertain economy buy and hold may not be the haven that it has been long considered to be. So consider gold as a way to hold part of your portfolio value and to serve as an investment hedge.

Common reasons for investing in gold:
Gold is always in fashion. It is a tangible product that can always be passed on without concerns for its desirability in the future. Contrast demand for gold with fluctuations in antiques and collectibles which are subject to the whims of fashion.
Owning gold can protect you from a decline in currencies or from inflation. Countries often start investing in gold when the economic times start tanking, and the more debt-laden an economy, the higher the price of gold per ounce will generally command.
Gold can be another diversification of your investment portfolio. According to financial experts diversification is considered the best reason for having gold.
Assuming your gold isn’t stolen, gold is a sound means for protecting wealth over a long period of time.
During a period of civil instability, gold is a way to protect assets, it is portable, easy to hide, and can give you something to hang on to when everything else is lost.

What Kills Day Trading (or Night Trading) Emini Futures? The G-Word

Thursday, May 12th, 2011

Ever see the movie, the Untouchables? It’s about a government agent, Eliot Ness who, along with his band of G-men (Government men), fights gangsters (like Al Capone) during prohibition. There are great shots in the film, guys hanging from moving cars, holding onto swinging doors while they shoot up restaurants with Tommy guns. Today we have our own Untouchables. We’ve replaced Tommy guns for computers and trading platforms. We sit in chairs instead of swinging from moving cars. And the killing, well, we’ve traded in the G-men for the G-word: Greed. (more…)