Safe havens? Bonds, metals, dollars

The Aden sisters, resource specialists for 30 years, look at the prospects for stocks, bonds, gold & silver.

By TheStockAdvisors Nov 21, 2011 10:04AM
By Mary Anne and Pamela Aden, The Aden Forecast

Caution remains the watchword, as stocks are not yet out of the woods. We recommended selling stocks on August 4 and we’ve been out of the stock market since and continue to feel that it’s best to stay on the sidelines to see how things evolve.

Meanwhile, gold, bonds and the U.S. dollar continue to be the main safe havens, so stay with them.
 
The leading indicator for the Dow Jones Transportation average is still on the decline. It has not reached a major low area, like it usually does after hitting major highs. This is also a sign of caution. 

The US dollar is currently at a five week high and it has room to rise further. The U.S. dollar index is now strong above 77. So keep your cash in dollars and/or buy the U.S. Dollar Bullish Index (UUP).

On the other hand, all of the major currencies are bearish and they’ll stay under pressure as long as the euro remains below 1.38.

Bond prices have headed higher and the 30 year yield fell to a six week low, below 3%. It looks like this will likely continue in the weeks ahead, as long as concerns persist.

Keep your bonds. In our portfolio, we continue to hold SDPR Barclays Capital Long Term Treasury (TLO).

Since gold recently resisted at the $1800 level, it's now forming a wide consolidation band, between $1800 and $1600. Whichever way it breaks will determine the next intermediate trend direction.

Silver is similar and its band is between $35.25 and $30. Keep an eye on these levels.

Our strategy for precious metals continues ... buy coins, bars and ETFs gradually to take advantage of any weakness.

The bull market is solid and it really has everything going for it. Keep your positions such as our core holdings in SPDR Gold Shares (GLD) and iShares Comex Gold (IAU).

Compared to gold, silver’s current bull market has been mild. Silver has risen 1000%  since 2003, whereas in the 1970s it rose about 3600%.   

The bottom line in our view, is that the explosion in silver prices is still to come. We continue to recommend a core position in iShares Silver Trust (SLV).

We also remind investors that stocks in general look ahead by about six months. So even though the news may be bad, stocks appear to be seeing brighter signs ahead. That’s why bull markets begin during dark periods.

And if a bull market is indeed getting underway, then it likely means the economy is going to
improve in the upcoming months.

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6Comments
Nov 21, 2011 12:02PM
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In the last Great Depression .. it was those that had self sufficiency like farmers without debt that did the best.  Most likely to happen with the super committee failing to act and Congress lock in a power struggle game of blame .. the Fed and Central Banks around the world will have to crank up the printing machines and get the rest of the tools out of the rest bucket to halt the global economic recession.  Ready cash for quick opportunities is probably the best economic sense at this time. 
Nov 21, 2011 12:11PM
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Whatever happened to dollar cost averaging? Fine. Stock fund prices are depressed. I'll continue to invest with dollar cost averaging each week into my 401K fund with a few 4 and 5 star rated funds-which have performed strongly and consistently over lifetime. When the market returns, as it always has, i'll be glad i stuck with my investment plan.
Nov 21, 2011 1:29PM
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I still can't figure out the OWS premise that Wall Street can come in and steal your money, How? We have the option to move our money wherever we want to, including the mattress. Wall Street is taking a hit just like everybody else in this dying economy. Banks are just as weak as anybody, they're still failing at a record rate.  The only player who keeps humming along, regardless of how bad they do, is the US Government. The Government is the ONLY entity we can't hide our money from and they don't mind stealing what ever they need to get reelected. It's not even safe under your mattress, they know how much you have by how much you spend and the IRS won't mind one bit busting your door down, searching in the freezer or under the mattress to get their share.  OWS and everybody else needs to be in DC shutting down business as usual.
Nov 21, 2011 12:57PM
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So much for the hedge fund industry. I hope the folks who ran those cute operations enjoyed their years in Fairfield County, Connecticut, and Saddle River, New Jersey, because in a few weeks they'll be disguising themselves as OWSers in some makeshift urban encampment in order to line up for three-day-old bagels. Personally, I look forward to test-driving a few $5000 "must-sell" pre-owned Lamborghini Sesto Elementos, not that I'd actually buy one. The nimble might even score some bargain beachfront property in the Hamptons. 
     It's been about a fortnight now since John Corzine's MF Global fund went up in a vapor, including a reported $800 million or so (rumored to be actually more like $2+ billion) filched out of clients portfolios that cannot be accounted for - though there are additional rumors that it constituted a batch of collateral that was liquidated a micro-second after its arrival at JP Morgan, which had lent Corzine's firm enough money to buy the rope that it hung itself with. Notice, the story has completely disappeared from the mainstream news media (while the Kardashians soldier on).
Nov 21, 2011 1:20PM
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Sorry Girls but you're forcast is a bit too optimistic. Claiming a Bull Market is a sign of an improved economy if bad advice.  Our wonderful Congress and President are doing what they can to see that the economy gets worse, MUCH WORSE.  January when the credit ratings drop again it won't be such smooth sailing this time. As a matter of fact, I believe we're on the cusp of a major collapse economically, 30% unemployment, 8,000 Dow!  
Nov 21, 2011 10:44AM
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With the greed of money the only safe place for it would be in hell.
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