All That Glitters Is Still Gold
Wednesday, June 20th, 2007
By Michael Lombardi, MBA for Profit Confidential
Of the four bull markets we’ve witnessed in the past decade, only two continue.
The tech bubble burst in late 1999. The U.S. housing market bubble started to deflate in 2005. Only two bull markets remain: China and Gold. My personal bet is that the bull market in gold bullion will outlive the bull market in Chinese stocks.
While I remain bullish on China’s long-term economic growth, the rise in the main Chinese stock index has been too steep too quick. Bull markets that rise too fast are prone to severe corrections at some point.
As for gold, the road to higher ground has been slow and steady. The bull market in gold really started in mid-1999 when an ounce of gold was going for about $250.00 U.S. per ounce. Fast forward to today, and that same ounce of gold will cost you about $665.00 U.S. — a rise of 166% in eight years or nice, steady growth of about 21% per annum… a bull market almost unnoticed by most investors.
So what’s the deal with gold today? Over the past year gold bullion has been stuck in a trading band of between $600.00 and $700.00 U.S. per ounce. Looking at the charts, I see gold getting ready for an assault above the $700.00 price range. And I also see many quality gold-producer stocks selling at very attractive prices.
We are told by central bankers around the world that inflation is a problem. We are also witnessing interest rates moving higher in most countries while the U.S. dollar continues under pressure. Can gold bullion become the choice “currency” for investors to park their cash in the short years ahead? I believe it will.
Next Post: Good Ways to Reinvest Those Newly Found ProfitsPrevious Post: Canada’s Black-and-White Economic Realities
Tags: bull market, chinese stocks, gold, U.S. economy
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Michael bought his first stock when he was 17 years old. He quickly saw $2,000 of savings from summer jobs turn into $1,000. Determined not to lose money again on a stock, Michael started researching the market intensely, reading every book he could find on the topic and taking every course he could afford. It didn’t take long for Michael to start making money with stocks, and that led Michael to launch a newsletter on the stock market. Today, Michael only employs the top market analysts and editors. Some of our recommendations have posted gains in excess of 500%! Michael has authored and published over one thousand articles on investment and money management. Along the way to building Lombardi Publishing Corporation, now with over one million customers in 141 countries, Michael became an active investor in real estate, art, precious metals and various businesses. Readers of the daily Profit Confidential e-letter are offered the benefit of the expertise Michael has gained in these sectors. Michael believes in successful stock picking as an important wealth accumulation tool. Married with two children, Michael received his Chartered Financial Planner designation from the Financial Planners Standards Council of Canada and his MBA from the Graduate Business School, Heriot-Watt University, Edinburgh, Scotland.Follow Michael and the latest from Profit Confidential on Twitter




