This has been a painful month in commodity land especially for anyone who bought around May 12, the peak of the most current gold rally. Since then, investors have lost 20% from its high of $730/oz to Friday’s (6/9) close of $608/oz. Those that purchased on the last day of this past year have a slightly differently perspective. Gold closed on 12/30/05 at $517. Over the past five years gold has averaged a return of 15% per year. No one wants to suffer through a 20% draw down in 4 weeks, but a 41% return in 4 ½ months was simply unsustainable. This is why I am a strong advocate of dollar cost averaging. If you made the decision to try commodity investing and went all in on May 12, you are probably ready to give up now.
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