On a different note, take a look at Gold ETFs and commodity mining companies, BUT WHY? Gold/Silver appears to be coming out of a BEAR market and starting a massive BULL run for next 2-3 years. In general commodity market appears to be turning around but why do we think it will start a BULL market? Besides will it be better than our market in terms of returns!!! Compared to our market the returns in commodities can be significant especially precious metals market.
Lets understand why we think commodities will do better in coming years:
- Lot of instability in geopolitical arena: Ukraine, Syria, Egypt, Iraq in civil unrest, China in confrontation over south Asia sea, and Euro-zone in financial turmoil
- Currency crisis: All federal governments are printing money and accumulating piles of debt, inflation is already rising and to add to that currency wars can drive financial system crazy
- Precious metals are a hedge against instability and inflation which in turn means market share of companies involved in mining these metals will appreciate significantly
- In general commodity prices will be rising hence companies producing them or involved in it has a tremendous potential to appreciate from current levels
- Debt markets around the world cannot be trusted once the currency wars are in forefront, where is the smart money going to flow into? Commodities and Stocks, which in turn means both will do good but commodities will do lot better due to the fact that supply is less than the demand and commodities market is relatively small compared to stock market.
What does it mean for our Investments?
- Mutual Funds - If already invested then stay put and enjoy the gains. If in debt funds then even those would be rising too so enjoy the gains for now. If in cash/FDs/Liquid Funds then as suggested last week, we could have started SIP but if planning to enter with lump sum then have patience and wait for right entry.
- Stocks - ONLY invest in strong patterns with good earnings and DO NOT forget to have STOP LIMIT in place. Some of our picks are doing great, you may want to check them out here.
Market continues to show strong bullish bias...