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Week in Review 8/4/06

Another good week for the commodity stocks.  Pause in interest rates will put pressure on US Dollar.  This will be good for gold, since it is inversely corrleated to the US Dollar.   Below are this week’s results of stocks regularly discussed here:

DOW   0.2%
S&P 500   0.1%
NASDAQ   -0.2%
GLD   1.9%
GDX   2.1%
CEF   4.9%
USO   1.9%
BRIC   -1.7%
BBO   0.3%

GLD – Gold Bullion Exchange Traded Fund (ETF)
GDX – Gold Mining Stocks ETF
CEF – Gold and Silver Bullion ETF
USO – Oil ETF
BRIC – basket of 4 country ETFs: Brazil, Russia, India and China
BBO (Big-Build Out) – basket of 12 stocks critical to the industrialization of BRIC

Refer to the following links for more information on above stocks.

GDX, CEF: Link
USO: Link
BRIC, BBO: Link

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Week in Review 7/28/06

Nice gains in both stocks and commodities as market anticipates the end of the interest rate raising campaign.  Below are this week’s results of stocks that are regularly discussed here:

DOW   3.2%
S&P 500   3.0%
NASDAQ   3.1%
GLD   4.1%
GDX   9.2%
CEF   3.4%
USO   -0.7%
BRIC   4.8%
BBO   6.6%

GLD – Gold Bullion Exchange Traded Fund (ETF)
GDX – Gold Mining Stocks ETF
CEF – Gold and Silver Bullion ETF
USO – Oil ETF
BRIC – basket of 4 country ETFs: Brazil, Russia, India and China
BBO (Big-Build Out) – basket of 12 stocks critical to the industrialization of BRIC

Refer to the following links for more information on above stocks.

GDX, CEF: Link
USO: Link
BRIC, BBO: Link

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DCA Experiment as of July 5

I have decided to rename the CEF experiment to the DCA experiment since it will include the results of dollar cost averaging into GDX as well as CEF.  It was another difficult month for CEF it lost 2.09%.  However, year to date CEF is still significantly outperforming the S&P 500 8.53% vs. 0.17%.  GDX had a better month returning 3.25% vs. S&P 500 0.44%.

The objective of this experiment is to demonstrate the power of dollar cost averaging.  I believe that it is the best investment strategy for the average investor.  If you are willing to learn technical analysis, you may outperform dollar cost averaging.  However, technical analysis can take a significant amount of time to master.

Continue reading “DCA Experiment as of July 5”

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The CEF Experiment

I am setting up a experiment with the objective to demonstrate that the average investor can reap double digit returns with a simple dollar cost averaging strategy.  See the June 9th’s article on the “No Brainer Investment Strategy to Double Digit Returns” for the basis of the methodology.  We will use two ETFs to validate this theory – Central Fund of Canada (CEF) and Market Vectors Gold Miners (GDX).  Each month we will purchase $1000 of CEF and GDX and compare it versus the S&P 500. Purchases will take place at the close on the 4th of each of month unless it falls on the weekend or holiday.  In that case it will be purchased at the next day’s close.

As of June 5, 2006 CEF was outperforming the S&P 500 13.02% vs. -0.64%.  CEF is compounded monthly.  S&P 500 is YTD return without compounding. Continue reading “The CEF Experiment”