Gold Stocks and Silver Stocks Forming Price Bottoms with Good Value
One of the best ways to hedge against inflation and rising interest rates is to have exposure to real assets in your investing portfolio. In particular, having gold and silver and some select gold stocks and silver stocks at the right time can be a wise investment. And this blog will detail why the current price levels and the inverted head and shoulders formation in the price of gold and silver make this a good time to start buying the hated gold stocks and silver stocks.
Momentum Rider is a big proponent of always having a portion of your investment portfolio in precious metals unless the markets are in a strong bear market. Obviously, 2008 was one of the few times that every asset was sold and we were not invested in precious metals. But, unless the markets are in a strong bear market, precious metals and commodities are sound investments. At this stage in the slow recovery, pullbacks or steep sell-offs in the precious metals markets and in gold stocks and silver stocks should be looked at as buying opportunities. We believe this is one of those rare buying opportunities for the beaten down gold stocks and silver stocks.
Momentum Rider’s Trading System is based on finding the best stocks to buy and the highest probability trade. Our trading system includes buying in the momentum direction of the market and in the matching timeframe you are trading. We use over 120 different scans in our trading system to find the very best stocks to buy. It works very well when scanning for gold stocks and silver stocks. And, not only do we focus on only the best stocks technically and fundamentally, we provide the right timing for an entry as well.
One of the keys in our trading system is to be patient for the best stocks to buy and to make sure they are in the proper technical setup. If you are an investor, being patient may take a change in mindset. But when the right time comes, use the cash you have and take advantage of a great value or buying opportunity in the very best stocks.
Also, we extensively use market timing in our trading system. Steep and large market sell-offs of 25% or more happen rarely and deep value investors should step in and take advantage of them. Investors should be buying on 7 to 10% precious metal corrections as well. Learn to identify the market turning signs and when to pull the trigger and always keep some cash handy for such occasions.
As we published in an earlier blog on the Inverse Head and Shoulders pattern that is forming (click here) in gold and silver, now is the time to start buying the beaten down gold mining stocks and silver mining stocks.
For gold, the accumulation range is between $1,585 and $1,740 with a neckline breakout level of $1,775.
For silver the accumulation range is between $29 and $34 with a neckline breakout level of $36.
Value Stocks – Gold Stocks and Silver Stocks
We have developed a watch list of the best gold stocks and silver stocks to buy in 2012. It is by no means an exhaustive list of quality precious metal stocks but it does represent a reasonable starting list of stocks you should consider for investment money. Notice how many of the stocks have very attractive valuations already. Realize that PE is only one valuation metric but many of these companies are also selling very close to their book value or even below their book value. There are numerous other metrics in our scans that gives us confidence in picking up some of these stocks on more mining stock selling.
The bottom line is that this list of the best stocks to buy in precious metals will provide investors a great opportunity for growing their retirement in the years to come. Keep watching the trends of the markets and the headlines. Many of the gold stocks and silver stocks on this list are ready to start buying at these price levels. Once the bottom is in on gold and silver, the second half of 2012 and 2013 could provide some very large gains. The key will be patience and investing in the best stocks to buy from our top gold stocks and top silver stocks. Note: CCJ is actually the best uranium stock to own but it typically tracks up with gold stocks.
Best Gold Stocks and Silver Stocks:
If you don’t want the risk of miners than take a look at the best ETF’s for gold and silver. We recommend GLD, SLV, IAU, SGOL, and SIVR for investing in the underlying price of gold and silver. There are also the mining group ETFs such as GDX, GDXJ, and SIL to remove some of the risk and volatility of owning individual mining shares.
Jesse Livermore at his prime became one of the greatest traders and investors ever by using the simple trading system rule of being patient until the best probability of making a winning trade was there. Paul Tudor Jones, who was also one of the best investors of our time with a very good trading system, made 26% per year for 20 years. His advice on this topic is the following, “If you don’t see anything you like, you don’t trade. You take risk only when you see a great opportunity”.
Take this great opportunity to snatch up some hated gold stocks and silver stocks while you can. Buy stocks when others are fearful and sell stocks when others get too greedy.
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Good luck in your trading and investing,
CEO Jalexa Trading Consultants, LLC
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