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[Sentient Being]

I'm a believer in the idea that the printing and borrowing may lead us to high rates and inflation with an economy that is either stagnate or in recession. That bonds would go down, fear will appear massively as the markets will go down as well leaving people running for Gold. My problem is that we are presently in a trading range that goes back over a year and it's very broad. And that Gold may well break down below that trading range before the higher rates show up. My other issue is I'm not a trader. So I've decided that if Gold is above this present trading range I want to be long and below the top of the range I really want to be out. Should the range break down, and some day rates start to rise, I could be convinced to buy at a lower price. But I'd have to see indication that a bottom may be in and that that bonds are starting to sell off. For now I've put in a stop loss on my current largest holding of Gold and it's not too far below. If Gold turns from here and soars, goes above the top of the trading range, fine, I'm long and will move the stop up a bit below the top of the range and ignore gold. But if Gold takes the next few weeks to grind down to the bottom fo the range I'll get stopped out along the way and not be buying again until the top of the range breaks. I believe that Gold will turn out to be a great long term investment, but I also believe I could be wrong for a very long time and become discouraged should I take a 50% haircut to the downside before it turns around. I'd rather take a small loss now and then wait for it rather than lose faith in the fundamental view and bail out with serious losses way down below the bottom of this trading range. I'm simply drawing a line in the sand and applying some risk control to my investing. Above this line own it, below it stay away unless there is very good, real, evident reason technically and fundamentally to go long.

Edited by Sentient Being, 05 January 2013 - 08:05 AM.