Look Out For Precious Metal!

Look out for the precious metal. They are rising and rising fast.

Precious metal have been underperformed compare to stocks and other commodities for the past few months. However in my opinion, you should at least allocate 25% of your capital into precious metal. They are going to explode just like 1980!

Why?

1. Billions of Dollar injected into the economics from central banks all over the world. Sudden increase in Money Supply = inflation. Many of you influenced by Keynes theory and think Inflation is calculated using consumer price index (CPI). Actually inflation should be calculated using increase in money supply.

2. Ben Bernanke. Last week Ben Bernanke remain as the chairman of federal reserve. He is throwing money from helicopter and everyone knows it. He will print infinity amount of money into the economics.

3. Interest rate. Even though everybody is talking about the recovery and end of recession, interest rate is kept low. Fed funds rate kept at 0-0.25%, Boj rate kept at 0.1%, Boe rate kept at 0.5% and ECB rate kept at 1%. Easy money is still here or should i say free money is at US which banks can borrow money for no interest!

So the best way to invest in precious metal is buying actual gold/silver/platinum/palladium bar or buying their future. However if you do not have the access to that, get yourself in precious metal etf such as gld or slv.

Try not to invest in stocks related to precious metal as most of the stocks are very expensive and overrated. Furthermore stocks tends to follow the stock market index and not their respective sector index. Example Barrick gold (ABX) has higher correlation with s/p index than gold future index. So this make the process of evaluate precious metal related stocks even harder.

Personally I got some of Zhaojin mining (1818.HK) and SLV.

P/S: to Tan, this is my recommendation. Try get some of these!