Lifetime High – Gold is up $26 Today – Why It Is Not Too Late.

It’s 9:18 in the morning on Tuesday, October 5th and I’ve been watching the market for a couple hours already.

I turned on my computer this morning and noticed gold is sitting at a new life time high of $1337.30 an ounce.

People just don’t understand how markets work.

Two years ago I wrote, “Once gold crosses the $1,000 mark, moves of $20 and $50 and even $100 a day will be commonplace”. This is already happening. The move today is a $25 move.

Mark my words; we will see daily $100 moves in gold before this bull market runs its course.

Why this will continue.

People do not understand the underlying fundamentals of a bull market.

It’s not their fault.

Investors either (a) were never taught how bull markets work or worse (b) they were miss taught by someone who does not understand how they work (read: a Wall Street financial advisor).

Let me explain.

The number one driver of a bull market.

And this holds true whether the bull market is in stocks, bonds, houses, gold, diamonds, corn, cotton, oil, wheat, coffee, sugar or even those pretty shells.  They all act the same.

Get this right and you will get everything right.

The main driving force of a bull market is to have the least amount of investors participate in it until the very last hurrah.

Think technology stocks in 1998 and 1999. In those two years alone technology stocks went up 300%! And this was after 16 years of almost a relentless upward movement north of 1,000%.

The actions of a bull market, any bull market have to be done in a way that feels the most intolerable to the investor’s brain.

Bull markets act in one of two ways (or both):

1)      The bull market moves in an unrelenting upward direction, not allowing investors to get into a position. Because the investor is always waiting for the pull back to happen. And the pull back never happens.

Thus leaving the majority of investors out of the bull market until the very end where the investor’s brain is forced to go into the bull market because it is just too painful to not be in.

2)      The bull market moves upward but with sporadic huge pull backs that make the investor second guess themselves and they sell their position at just the wrong time.

And then the investor is on the sidelines and watching the market move up without them but they are so angry they sold that they emotionally cannot get back in. Until one day the investor’s brain is forced to go into the bull market because the pain of not being in is too much to manage.

The precious metal’s bull market that started in 2000 has both scenarios happening. Huge scary pull backs and points where the price just seems to go straight up.

Today we are in the ‘prices going straight up’ phase.

This is why you will often hear me say that in a bull market your only job as an investor is to get a position and hold that position through the whole bull market run.

If you didn’t know, the average length of a bull market is 17.5 years.

We are 11 years into this precious metal’s bull market. And if this market run is anywhere in line with historic numbers we have another six to eight years to go.

It’s like buying the company Cisco at the end of 1993.

Cisco’s stock increased 2,000% between 1990 to the end of 1993.

And then increased another 3,000% from 1994 to the beginning of 2000.

The point is, it’s near impossible for the investor’s brain to grasp what the price of an investment can do in the future.

So if you do not hold any gold or silver and are conflicted in how to start, let me help you right here.

Start buying a small amount each month (e.g. ½% of your portfolio) and do this every month for the next year.

This way you have positioned your money in the current bull market years before you might have ‘felt’ ready.

I’ve mentioned it before and I’ll mention it again.

You don’t have to go it alone.

There is a small growing group of investors that understand the limitations of the human brain and how it can hurt that human’s investments AND how to massively profit from bull markets.

Being part of a tribe or group of critical thinkers who take action to gently leverage the imbalances of the stock market to their favor is one of the keys to having your money grow.

My Insiders Club is such a group.

Do you have what it takes to do what is best for your money? Find out here.

Together, we are growing and protecting your money,

RC Peck, CFP

3 Comments

  • Harriet Wright

    October 5, 2010

    a friend who bought gold when it was about $300/ounce says she wants to hold onto it, til its over $2,000/ounce, then consider selling. You’ve indicated that you expect to see it continue to rise, so shouldn’t she buy more, hold onto it, then sell later, when the price levels out, stays level and begins falling?

  • PJ Van Hulle

    October 5, 2010

    Thank you, RC!

    I love the way you explain these concepts so clearly. It IS scary to invest in gold when it’s at a lifetime high and other people are saying that it has to go down.

    Of course, there is never a crowd on the leading edge, right? I’ve heard that the best way to invest is see what most people are doing and do the opposite.

    I’m so happy that you encouraged me to get into the market because I’ve been able to see my portfolio grow in value consistently… even though it feels scary to go against the status quo.

    Thanks for being willing to speak out for what you believe in and leading the way.

    Love & Prosperity,

    PJ

    —–
    PJ Van Hulle
    Executive Director
    Real Prosperity, Inc.

    “Have Fun. Do Good. Make Money”

    http://www.top5keystosuccess.com

  • Steve

    October 6, 2010

    RC–I first hopped aboard the gold train, per your recommendation and counsel, at about $800 an ounce. That wasn’t so long ago. I want to thank you, as I never would have even thought of doing it otherwise.