Own Some Gold. Pray it Doesn't Perform!

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‘Performance' in the terms gold investors look for suggests dollar collapse and all the financial instability that goes with that scenario.

I am indebted to US broker and analyst, Rick Rule, for the quote used as the title of this article. Rick was writing about investment strategy in the post sub-prime markets in an article published in Uranium Report (well worth reading as it is full of sound advice for those who invest in metals and mining stocks. For the full transcript, go to: The Uranium Report,), which also, not surprisingly given the vehicle in which it appeared, took a good look at uranium stocks among others...

Rick Rule's judgement on this has to be spot on, particularly for US investors. ‘Performance' in the terms gold investors look for suggests dollar collapse and all the financial instability that goes with that scenario. Gold and gold stocks provide insurance against such an event and if viewed upon in that light gold investment has to be part of a commodities-based portfolio - or indeed of any portfolio which carries a degree of insurance against dollar meltdown.

What other strategies does Rick Rule recommend. He feels juniors in general are drastically overpriced - particularly as "Only about 10% of 5,000 odd junior companies have any real value, and most of the market players don't have the ability or the will to discriminate between the good, the bad, and the ugly." As such juniors are, and always have been, risky investments which suggests high rewards if the right stocks are picked, and a total bust for those that die - which is the fate of many. Juniors are particularly vulnerable in times of financial turmoil, except perhaps those which have a good story and good potential in the precious metals sector which may perform better alongside a rising gold price.

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