Gold

I took a 15% portfolio position in gold in 2001 when gold traded for $270 as explained in my September 2001 iTulip.com article Questioning Fashionable Financial Advice. As of the time of the creation of this blog, gold trades for $1,356, more than five times what I paid. Since the objective of any investment is maximum gain at lowest risk and minimal transaction costs (capital gains taxes and brokerage fees) I have never traded in or out of the position, and balanced it with long-term Treasury bonds paying 6.3%. The resulting portfolio is shown on the Investments page of this site.  

Our objective here is to determine when to sell gold. The answer to the question of of when to buy gold  is covered in dozens of articles that appeared on iTulip.com since 2001 that you can find with a google search such as What gold bubble? (2006) and Lessons of the American Lost Decade – Part 1: The gold bugs were right (December 2009).

The chart below depicts my view of the development of the gold market from the time I entered it to a future time when I will exit it.

 Click to Enlarge

From time to time I will post a news item on the Postcatastrophe Economy Gold page that helps us understand where we are in the gold market development process so that we know when to sell gold.