I hope you did buy some gold in January.  Gold is up 10% since the beginning of the year.  Everything else is down. 
Even if you believe in averaging down, please stop buying stocks.  At least buy only the ones with high dividend yield.
 Also get ready to get out of treasuries.  Soon that will be the next category to go down. 
I know it’s painful to admit at down 7500 the need to stop buying stocks but please do.   Stocks at best will go sideways. 
Gold has at least another 10% or maybe even 20% from here to the end of the year.  Like it or not gold is the only investment vehicle of 09…

Ellis Hannican had a wonderful article on AM New York newspaper today calling it as is.  I agree with him in everything and especially : “If this economic crisis has done nothing else, it has exposed once and for all the fraud of financial expertise. When it comes to money and investing, no one is smart these days.

The supposed experts all were making money in a long, rising market, just like us dumb people were. The minute the market turned, so did their fortunes. If anything, their alleged competence left them hanging

on longer limbs.”

The so called expert bankers don’t know anything and we are better off following our own investment ideas.  WE ARE BETTER THAN BANKERS….

Here’s a slightly shortened version of the article the article:

“With each passing day, the evidence grows stronger: None of these supposed financial geniuses knows           

anything.

You see the names on that I-was-bilked by-Bernie list? Talk about people who should have known better!

According to the bankruptcy court, the Madoff-victim list reads like the lunch-table roster at the Four Seasons Restaurant or the late-afternoon green-room census at CNBC.

Some very smart people suddenly look very dumb. Some of global banking’s proudest names — J.P. Morgan, Bank of America, Citigroup, UBS and HSBC. The usual sprinkling of boldfaced hangers-on: Sandy Koufax, Larry King, John Malkovich. The list goes on and on.

Top-flight money manager (and longtime Warren Buffett crony) Sandy Gottesman. The highly sophisticated energy-and-philanthropy Belfer clan, who seemed to have managed a rare doublefleece-

me, getting ripped by both Enron and Madoff.

Someone had better warn these people now: Respond to no e-mails from purported Nigerian princes seeking easy-money partners in America.

All of which bring up an obvious question:

If such savvy people could be such easy pickings for such an obvious Ponzi scheme, what possible chance do you and I have?

Perhaps no worse than they do.

If this economic crisis has done nothing else, it has exposed once and for all the fraud of financial expertise. When it comes to money and investing, no one is smart these days.

The supposed experts all were making money in a long, rising market, just like us dumb people were. The minute the market turned, so did their fortunes. If anything, their alleged competence left them hanging

on longer limbs.

Despite their inside knowledge. Despite their shrewd advice. Despite business-magazine profiles and braggadocios returns.

And even now, nothing at all has changed.

Thursday, here was another crew of supposed experts, swapping their latest stock tips, unveiling their somber strategies, prattling away on the all financial news shows.

Only one thing could be dumber than that. Those of us who’d follow them now.

On 1/1/09 I had strongly suggested to sell stocks and get out.
The Dow Jones index was slightly over 9000 points then.   It now is at 8063 points.
There is a common belief that since the index came down from 14,000 level, it will have to go up higher sooner or later.  My answer to that is “Not Necessarily”.
It’s true that some stocks will bounce back from their current levels, but others such as Lehman, Bear Stearns, Citigroup, Bank of America, AIG, Fannie Mae either became zero or they run the risk of being nationalized which will make their share prices to zero or close to it.
I completely agree that nothing goes up or down forever  but we have to accept the new reality that we live in, come to terms that many stock will never see their high level prices ever again and start acting accordingly.
We are at Dow 8000 level and I am sure that soon we will climb to 8500-8700 and fall back to 7500 before or after that.
There unfortunately is no reason for a rally in the market other than the fact that stocks have lost a lot of their value from their highs.  This again unfortunately is not a good enough reason.
Just sell your stocks whenever you see the index at or slightly over 8700. 
You will have a chance to get them back at lower prices or try making money using a financial instrument called options.   Even though it’s extremely risky, using options might help….

I wouldn’t want anyone to think that I am obsessed with Gold and that this blog is only about it. 
However in January the Dow fell 13% and gold went up 5%. 
I’ve been pushing gold because I believe the reasons for gold prices to go up are simple and they make sense.  

Gold should end 2009 at least 10-20% higher than where it ended 2008 translating to a price of between $969 and $1057 per ounce. 
So here we go one more article about gold and how to follow the price and buying it…

I have two ways to follow the price of gold.
One is to check the price of the metal just like a stock using the symbol GLD. 
GLD is the gold exchange traded fund, meaning it is a fund that only owns gold and acts in parallel to the price of the metal. 
You can also buy GLD just like buying any stock with any brokerage account…
I also check the page http://www.kitco.com/charts/livegold.html to see the actual  per ounce price.

If suddenly the central banks of the world decide to sell the gold in their reserves which I think is unlikely since other countries would absorb the sale, than of course the prices would go down.

Remember also that nothing goes up or down forever and if you decide to invest in gold and start seeing the prices go down, don’t wait to try to catch the absolute bottom or wait to sell once the prices reach the $1000 level.
I think the reasons for investments should make sense and they should be simple to understand.
Act if you think like me that it makes sense to own gold.
Off to new subjects…….

Today I will continue with reasons why gold should do well.
As of today an ounce of gold is worth $8920.00 which is higher than where it ended 2008 and this is when the Dow Jones index has lost about 1000 points so gold is already doing well.
Obviously nobody can guess the price movements but I wouldn’t be surprised if gold will be worth 10-15% more next year this time.
Here are a few more reasons…
US, British and European governments will have to increase their money supplies by printing in order to pay for the bailout packages, bad mortgages, and increase spending.
One currency might do better than the others but at the end the only constant will be gold and it will take more paper money to buy the same amount of gold.
I am not even mentioning the possibility of inflation.  Right now the demand for goods, services and assets such as housing are falling, and our government is doing everything to stop this.
It might take time but at the end the government will win by spraying more money around. 
You ask how?  Because they can.  They own the printing presses…
The slightest stabilization of economy will push the gold prices further up….
Just start following the price of gold.. 
Today I will continue with reasons why gold should do well.
As of today an ounce of gold is worth $8920.00 which is higher than where it ended 2008 and this is when the Dow Jones index has lost about 1000 points so gold is already doing well.
Obviously nobody can guess the price movements but I wouldn’t be surprised if gold will be worth 10-15% more next year this time.
Here are a few more reasons…
US, British and European governments will have to increase their money supplies by printing in order to pay for the bailout packages, bad mortgages, and increase spending.
One currency might do better than the others but at the end the only constant will be gold and it will take more paper money to buy the same amount of gold.
I am not even mentioning the possibility of inflation.  Right now the demand for goods, services and assets such as housing are falling, and our government is doing everything to stop this.
It might take time but at the end the government will win by spraying more money around. 
You ask how?  Because they can.  They own the printing presses…
The slightest stabilization of economy will push the gold prices further up….
Just start following the price of gold.. 

A few weeks ago I shared with you my thought that an investment in gold should do well in 2009. 
I now believe it even more strongly.
 
In 2008 when the price of every asset went down, but gold ended the year at $881.00 an ounce, a 5% gain from the year before.
 

The so called “expert bankers” who destroyed the value of our retirement and saving accounts might base a decision on last year’s performance but if that were true we should have had a huge stock rally by now.  I believe that past performance does not mean a thing but here are a few reasons why I think gold makes sense regardless. 

Our government has been running a huge budget deficit, which means it is spending the money that it doesn’t have.  Due to the current crisis even more money will have to be spent which needs to be borrowed since our country has no savings for a rainy day.

Now, what happens when you already owe a lot of money to your credit cards and instead of trying to pay back, you increase your borrowing???
At some point your credit score gets damaged and it gets more difficult and expensive to borrow.

The exact same thing happens to countries, except that instead of credit cards governments borrow from other countries by issuing and selling treasury notes. 

Soon it will probably be noticed that we as a country are not paying our bills, and are only raising our debt. 
The same thing that would happen to you and I would happen then to the government which is a damaged credit score making it more difficult and expensive to borrow.
The value of the currency of a country is directly linked to its credit score.  In our case as our debt level raises the value of the dollar could start falling like a stone, raising the price of dollar denominated assets such as gold.
This is only one of the reasons why to me it makes sense to buy gold and I will continue with more……

Let me know if you agree or disagree, I would love to learn from you..  
Whatever you do please don’t just believe “expert’s” investment opinions that you read or hear.  They all have an agenda and don’t even know what they are doing themselves. 
Think in a simple way and decide for yourself….

Since we now know and agree that bankers, for incompetency or greed, don't mind losing our money, destroying portfolios and getting commissions and bonuses in the process, we need to stop crying and start helping ourselves.

Let's start with the idea that you do whatever you do for a living, save your hard earned money and then give it to someone else so they "manage" the funds who usually end up losing the majority.

We will have to start learning and taking care of our funds ourselves.  There is no other way.  Every single one of us will have to learn how to invest.

It really is not that complicated.  You don't have to spend all your time reading newspapers or watching finance shows either.

There are 3 simple golden rules to keep in mind and that's it.

Golden rule 1:  If an investment idea or financial offer does not make sense, is not simple enough and requires long explanations, than you have to stay away from them.

Golden rule 2:  Never forget that everything you hear or read is a pure sales pitch.

Golden rule 3:  You have to be flexible, keep some cash reserves and be ready to change course if you are on the wrong side.

Honestly that's all there is for successful investing.  Let's open the ideas a little:

Investments and money management are really not that hard or complicated.  The only thing bankers do, is to collect large sums of money and take advantage of wholesale rates that are not available to us.  If wherever they are placing the funds are too complicated or hard to understand than STAY AWAY!!!  If you don't understand it, chances are the ones trying to sell the idea to you, don't understand either and they probably are pushing it for a hefty commission.

Stay with simple and understandable and I promise you will do just fine.

Do you ever read the business, or finance section of newspapers or watch financial news?  All those "experts" in fancy suites using big words to explain what has happened or will happen….I have news for you.... They are trying to sell you the positions that they already are in.  If somebody is pushing that the market will go up, then chances are he or she already has a huge position and needs the market to go up.  He has to convince you, so that you come to market, push the prices up so they can sell you their positions.

How do you otherwise explain that at a given moment half of the "experts" think that the market will go up and the other half think that it will go down?  Don't believe what they say.  Listen to them if you like but don't assume that they know anything.  These bankers bankrupted their own institutions for heavens sake!!!!

You have to be flexible in your investments; you have to come to terms that you will be making mistakes.  What's important is not to be stuck in the wrong path.  Just keep some cash as reserves at all times so you can balance your positions if needed.  If you bought or sold a stock and its going the other way, you need reserves to either save it or to restart a new position.

That's it, play by these 3 rules and you will do all right.  Heck even if you don't at least you are in charge and don't pay a slick banker to lose your money.. 

You are and will always be better than bankers in managing you own money…..