Posted on

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”

Posted on

The No-Brainer Investment Strategy to Double Digit Returns

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.

Continue reading “The No-Brainer Investment Strategy to Double Digit Returns”

Posted on

CEF Follow-Up

I am sure many of you have seen the headlines. Gold Climbs above $700

http://www.forbes.com/feeds/ap/2006/05/10/ap2734388.html

Metal mania: Aluminum hits 18-year peak

http://economictimes.indiatimes.com/articleshow/1523103.cms

Copper surges on supply woes

http://www.miningweekly.co.za/min/news/today/?show=85814 

Commodities are breaking out to new highs daily.  Unfortunately only those considered the “smart money” are benefiting from these record prices.  My guess in about five years your advisors and brokers will start calling telling you about a hot new gold stock.  The objective of  “The Time and Money Group” is to provide resources and information to enable you to take charge of your financial future.  Hopefully, we will help you become part of the “smart money” crowd. 

Continue reading “CEF Follow-Up”

Posted on

Getting Started in Gold/Silver Investing with CEF

I am a big believer in commodities.  This includes all commodities: Precious Metals – Gold, Sliver, Palladium, Platinum; Base Metals – Copper, Zinc, Lead, Aluminum; Energy – Oil, Uranium.  

“Commodities demand is growing for a variety of reasons, but the great industrialization of Asia is certainly the primary one.  About half of the world’s population lives in Asia and has never experienced anything like the abundant material standard of living that we take for granted in the States and Europe.  As the rise of Asia gradually increases the local standards of living, the per capita consumption of virtually all major commodities will probably eventually approach first-world levels.

China is the greatest example of this phenomenon, as a recent Earth Policy Institute report pointed out.  The Chinese collectively already consume 40% more coal, 68% more meat, and 148% more steel each year than the United States.  A fascinating subsequent EPI report just published this week, while unabashedly environmentalist in focus, ponders the impact on commodities if the Chinese per capita income of $5k eventually reaches the US level of $38k.” – Adam Hamilton

Continue reading “Getting Started in Gold/Silver Investing with CEF”