Bernanke speaks, and gold surges
After a summer lull, Wall Street kicks off what will be a busy fall on a positive note.
So it begins. After one of the tightest trading ranges in history, stocks are coming back to life after an eagerly anticipated speech by Federal Reserve Chairman Ben Bernanke at the Kansas City Fed's Jackson Hole symposium. There, Bernanke laid the groundwork for additional stimulus measures at the Fed's upcoming policy meeting on Sept. 13, noting that labor market weakness is a "grave concern" and that the central bank has the tools and capacity to do something about it.
But really, it's gold, silver and the related mining stocks that are perking up in a big way. Not only are traders reacting to the likelihood that the Fed will take action -- thereby pushing inflation higher and the dollar lower (both positives for gold) -- but the European Central Bank is also preparing to take action next Thursday.
Here's how investors should play it.
The simplest and plainest way to get exposure is via raw-metal ETFs like the Gold Trust (GLD) and the iShares Silver Trust (SLV), both of which I've been talking about in my columns and blog posts. While they are a little short-term extended, both are just emerging from long medium-term downtrends dating back to the beginning and middle of 2011. If inflation kicks higher, as I expect, both should have more upside progress yet to come.
At this point, I am recommending my readers and newsletter subscribers focus more on mining stocks, many of which are just now breaking out of consolidation patterns. The list of new ideas includes Newmont Mining (NEM), which is just starting to move. As a result, I'm adding NEM to my Edge Letter Sample Portfolio.
Existing holdings that look good for new money include Kinross Gold (KGC), Keegan Resources (KGN), and Endeavour Silver (EXK). Other highlights include the VelocityShares 3x Silver (USLV) a triple leveraged bet on silver that's up 51% since I added it on July 25.
Disclosure: Anthony has recommended EXK, KGN, USLV, and NEM to his newsletter subscribers.
I found NEM with the help of technical screens developed with Fidelity's Wealth Lab Pro back-testing tools, which you can find here. (Fidelity sponsors the Investor Pro section on MSN Money.)
Check out Anthony's investment advisory service The Edge. A two-week free trial has been extended to MSN Money readers. Click here to sign up. Contact Anthony at email@example.com and follow him on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.
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Not that I disagree with holding coin or bullion, but many that do, tend to hoard always expecting to get more, next week,month or year...
Not falling in love with any investment is key...
Problem I have with physical PMs, is the problem that many have...
Expensive to buy, fees and commissions.
Safe Storage can sometimes be a problem.If large amounts.
Expensive to sell, see above..and sometimes difficult; To get your price.
If you overcome all the hurdles, more power to you...
I buy and sell miners, easier for me.
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[BRIEFING.COM] The stock market maintained a narrow trading range on Thursday before ending the session essentially where it began. The S&P 500 added less than a point, while the small-cap Russell 2000 (-0.2%) underperformed.
Equity indices displayed early strength thanks in part to an overnight boost from better than expected economic data in China and Europe. Specifically, China's HSBC Manufacturing PMI surged to an 18-month high (52.0 from 50.7), while Eurozone Manufacturing PMI ... More
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