I will apologize up front for the tone of my answer to this question as it may not read very kindly.
I am thinking of making a investment in the gold area, namely one of the gold/mining funds. The question is do you think the market has passed by this buying opportunity?? I have about 10% in a HealthCare fund that has not done well in the last 4 months, was thinking of flipping it to a commodiaties type of fund. Thoughts??? Suggestions???
I'll get to the either/or aspect in a moment but assuming it must be either/or my initial reaction is to wonder if he is selling healthcare low to buy gold high.
That the investor is in a position where he is considering one over the other leads to me to conclude that this person is unlikely to have a lot of long term success with his portfolio. Either he is trying to chase heat from sector to sector and if, as shorter term trader, he has missed the move in gold up to this point he has missed a multi year move, multi year!
If he believes in diversification he has missed the boat on that as well. He has only been in this healthcare fund for four months and has lost patience already?
The heat chaser in me thinks gold can keep going. There is a mania currently unfolding. Not a bubble, but a mania. However, I don't have to be right about gold still going. I always maintain exposure to gold. I do not own gold at the expense of something else.
In February I shaved off some exposure. If gold keeps going up in this fashion I will be inclined to shave off a little more. Trying to pick a number where it tops out could be fun but has a high probability of being a money loser.
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8 comments:
It would be interesting to know if the reader owns anything other than the healthcare fund. If not, then he either needs to not be in the market or he needs to diversify across different industry groups. So critical not to be in one industry. Roger - what are your thoughts on the pay package of United Health's CEO that has the stock in a rut for a while now.
Couldn't agree with Faisal's comment more. United's pay package is simply obscene in a world where pay packages really have to go some to stand out, this one really stands out. The company is also underperforming not just in stock price but in terms of its core market as well. Stay far away.
The reader said it was 10% of his portfolio.
I will address UNH in a post
For what it's worth - I have seen several references (rumors?) about a large Health Care Fund liquidating it's holdings. This is being cited as the cause of downward pressure on prices of Health Care/Biotech recently.
OG
UNH, AMGN, DNA, MDT, it's been really ugly out there. NVS has held up pretty well (thanks for hipping me to that one). I wonder when they'll stop falling.
Didn't healthcare used to be seen as defensive? Ouch.
Maybe people are selling it to chase metals and energy.
Roger, I don't think your tone was too unkind.
From my experience investors that "get tired" of one investment and switch to another just because it is hot is the worst investmentor of all.
They lose 10% on one stock and then move to another and lose 10% and before long no equity left.
The best advice about this is to forget the past and only decide on the present tense. Would you buy your stocks as they stand now? If not then sell and if yes then hold or buy more.
I never noticed a wheelchair in the word verification screen before. Interesting.
Pretty much the bottom line question would be do you see Health Care rebounding in 2006 and out performing Gold or is HealthCare pretty much on a level to decreasing plane? I have 10% in Healthcare and have had it for the last few years and 0 in gold. Did I miss the boat on gold????I am looking for growth.
Yes, you missed the big gold run-up, the 'easy money' as many like to say (even though this is usually only true using 20/20 hindsight). If you are looking for growth you may find it in gold and silver but at 10% of portfolio allocation you also risk fairly serious loss. Why not think in terms of moving say a third or at most half your health position (rather than flipping the whole thing) and look for a good entry point: Gold has had a very strong run and seems ready for a breather. Be patient; buying something everyone loves usually doesn't work well, buying something everyone hates usually works better. And BTW health will eventually be what everyone loves again and you won't mind watching a 5% position in your portfolio grow to 10% when that happens (you'll generously sell some to those newly enamoured souls of course).
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