One rule I have long "invested" by is to buy a stock when it is at or below its 40 month moving average. The 40 month is arbitrary, double the 20 month which is commonly used in Bollinger Band work. Nonetheless, the concept is that the long term average moves at glacial speed. Thus it will continue to rise over time until a definite trend change takes place reflecting negative fundamentals in the company. Even then, through the ever powerful regression to the mean effect, should the trend start turning down, chances are strong that the price will bounce back to the average and one can exit, albeit with some loss, but not so significant as the average's rate of change isn't rapid.
Royal Gold is a gold streamer, a middle-man in the delivery process. My portfolio holds, GLD; a streamer, RGLD; and a miner, GOLD. Same thing in the silver complex: SLV; a streamer, WPM, and a miner, PAAS.
While I have been playing GLD and SLV with specific price targets in mind for the year, $35 for SLV and $220 for GLD, I tend to do LEAP option spreads, now adding positions in the June 22 time frame. For the streamers and miners, I tend to be outright long either with the stock or LEAP options. Their upside, based on historical review, can be enormous. In some of these stocks, looking at the Jan 22 option prices, the premiums are high so I tend to buy the stock instead.
Prices may get a bit cheaper as I look at interest rates and the dollar. Rates look to be headed still higher yet but with resistance coming soon. I'll add the charts in comments. While these both look to be headed some higher, TLT, a 20 year bond ETF, is holding on the 40 month moving average as well. I added some this past week but still hold TBT LEAP options in the event that interest rates get away from the market. While the FED did nothing this week to tamp down rates, at some point I would expect that they will have to come in and take action. The market seems to want to test their resolve. With $28 trillion in debt, the US government cannot afford higher interest rates. WIth Janet Yellen, former Fed chair, at the Treasury helm, one can only expect a continued flood of money into the system, lowering interest rates, crashing the dollar and sending precious metals higher.
It's just a matter of time.
Royal Gold is a gold streamer, a middle-man in the delivery process. My portfolio holds, GLD; a streamer, RGLD; and a miner, GOLD. Same thing in the silver complex: SLV; a streamer, WPM, and a miner, PAAS.
While I have been playing GLD and SLV with specific price targets in mind for the year, $35 for SLV and $220 for GLD, I tend to do LEAP option spreads, now adding positions in the June 22 time frame. For the streamers and miners, I tend to be outright long either with the stock or LEAP options. Their upside, based on historical review, can be enormous. In some of these stocks, looking at the Jan 22 option prices, the premiums are high so I tend to buy the stock instead.
Prices may get a bit cheaper as I look at interest rates and the dollar. Rates look to be headed still higher yet but with resistance coming soon. I'll add the charts in comments. While these both look to be headed some higher, TLT, a 20 year bond ETF, is holding on the 40 month moving average as well. I added some this past week but still hold TBT LEAP options in the event that interest rates get away from the market. While the FED did nothing this week to tamp down rates, at some point I would expect that they will have to come in and take action. The market seems to want to test their resolve. With $28 trillion in debt, the US government cannot afford higher interest rates. WIth Janet Yellen, former Fed chair, at the Treasury helm, one can only expect a continued flood of money into the system, lowering interest rates, crashing the dollar and sending precious metals higher.
It's just a matter of time.