This catalyst will keep the gold miners shining, traders say

Investors are putting their money in gold these days, Kelly said Wednesday on CNBC's "Power Lunch," because of negative interest rates around the world. 

When interest rates are high, gold looks worse in comparison, since the metal doesn't yield anything. But when rates are negative, a nonyielding asset actually looks like a more reasonable investment.

DYI Comments:  Gold is on the move along with the mining companies stock values. However, after a run of 70% to 120% move off the bottom waiting for a pull back is a reasonable assumption. DYI's weighted averaging formula pared back to 17% allocation. 

Updated Monthly

AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 8/1/16

Active Allocation Bands (excluding cash) 0% to 60%

83% - Cash -Short Term Bond Index - VBIRX

17% -Gold- Precious Metals & Mining - VGPMX

 0% -Lt. Bonds- Long Term Bond Index - VBLTX

 0% -Stocks- Total Stock Market Index - VTSAX

[See Disclaimer]

As of 8-12-16 Dow/Gold Ratio 14 to 1 (rounded).

There's life left in this gold run that began with it's secular bottom in 1998 at a Dow/Gold Ratio of 44 to 1!  Those were the days of "shooting fish in a barrel" with gold/precious metals mining companies on the give - away - table!  While everyone had "gone wild" with high tech, Dot.com companies the value player was buying long term bonds and gold/silver precious metals mining companies.  What a dichotomy!  Value is value.  Here is the result since the year 2000.

  8-1-16

Updated Monthly

 From High to Low

+365.8% Gold

+163.5% Transports

+151.1% Utilities

+  66.4% 30 year Treasury bond
+  63.1% Swiss Franc's

+  62.5% Oil

+  60.3%  Dow
+  47.9% S&P 500

+  26.9% Nasdaq

That was then, this is now.  Gold/silver precious metals mining companies have further to run.  Another push higher reducing the Dow/Gold Ratio, I will move up my sentiment indicator another notch to Optimism.

  

Market Sentiment

Smart Money buys aggressively!
Capitulation
Despondency
Max-Pessimism *Market Bottoms*Short Term Bonds
Depression MMF
Hope
Relief *Market returns to Mean* Gold

Smart Money buys the Dips!
Optimism
Media Attention
Enthusiasm

Smart Money - Sells the Rallies!
Thrill
Greed
Delusional
Max-Optimism *Market Tops* Long Term Bonds
Denial of Problem U.S. Stocks
Anxiety
Fear
Desperation

Smart Money Buys Aggressively!
Capitulation

Once the speculative juices began to flow Gold will cut through the three levels of Smart Money buys the Dips, moving quickly into Smart Money - Sells the Rallies.  That is a few years out....So...for now wait for a pull back for gold/silver and/or precious metals mining companies stock prices.  When it happens, I'll be "pounding the table" once again advocating their purchase.

Good Hunting!

DYI

This blog site is not a registered financial advisor, broker or securities dealer and The Dividend Yield Investor is not responsible for what you do with your money.

This site strives for the highest standards of accuracy; however ERRORS AND OMISSIONS ARE ACCEPTED!

The Dividend Yield Investor is a blog site for entertainment and educational purposes ONLY.

The Dividend Yield Investor shall not be held liable for any loss and/or damages from the information herein.

Use this site at your own risk.

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.