Gyroscopic Investing

What, no screaming about the horrible decline in stocks?
Note: I don't have any stocks, so this is just a public service announcement. 

At least TSLA and TWTR are up today, happy with that :-)

I bet heavily on the ^VIX today and yesterday. Why, what happened? 

3.5% off the all-time highs feels like panic given stocks unrelenting rise. Doom has come! But probably not.

Make it stop.
Please...

I've been accumulating IJH (mid-cap index) and IJR (small-cap index) on every dip.

ozzy wrote: I've been accumulating IJH (mid-cap index) and IJR (small-cap index) on every dip.

Smallcaps actually had a nice recovery today.

ozzy wrote: I've been accumulating IJH (mid-cap index) and IJR (small-cap index) on every dip.

Always wondered how dip-buyers define a "dip" and where the money comes from to buy "every dip."

iwealth - For me a "dip" means a new recent low.  My money comes from the surplus of my paychecks.  And I do the same for IAU and TLT.  I buy the lagging asset when its "On Sale".

Ouch, I feel sorry for people heavy in stocks today.

Pointedstick wrote: Ouch, I feel sorry for people heavy in stocks today.

Me too... as long as they haven't heard and dismissed the notion of having some gold as a counterweight. 

MangoMan wrote: Interestingly, the gold miners got hammered today even though gold was up.

Gold stocks are stocks. Gold is gold. They aren't the same.

Saw this and had to check...wow.  What happened today?

CNN seems to like calendar-based explanations of stock market performance dips.  Last month it was "September is bad for stocks".  Before that it was "sell in May", then "summer is bad for stocks".  Now it's "October is scary for stocks."  I guess that's what you write when you want to sound smart but don't have anything worthwhile to say.

Note to all those who were frantic to avoid buying bonds in a recent thread:  SEE????  TLT went up more today than the stock market went down.  Gold went down a bit, so PP is probably near flat for the day.

Actually GLD and IAU were up a little, making the day positive despite massive stock market losses.

Now GTU was another story!

sophie wrote: CNN seems to like calendar-based explanations of stock market performance dips.  Last month it was "September is bad for stocks".  Before that it was "sell in May", then "summer is bad for stocks".  Now it's "October is scary for stocks."  I guess that's what you write when you want to sound smart but don't have anything worthwhile to say.

"Sell in May and go away" is a widely used investing strategy. You exit the market in May and come back in November. It actually backtests quite well.

Reub wrote: Actually GLD and IAU were up a little, making the day positive despite massive stock market losses.

Now GTU was another story!

Good for me if that keeps up, as I'm planning to trade physical gold in my retirement account for GTU outside. 

What I meant was that GTU was down today while GLD and IAU were up, once again under performing.

Reub wrote: What I meant was that GTU was down today while GLD and IAU were up, once again under performing.

Is there a financial reason GTU is so low?  I mean like increased risk in the underlying company itself?

For every day that GTU underperforms, there seems to be another day that it overperforms compared to GLD.  Over the long-term, the performance seems to be quite similar.

GTU has a lag compared to the gold index price.  It runs at a discount when few people are buying (relative to sellers), and at a premium when there is high demand for gold.  So it does not necessarily track gold perfectly on a day to day basis.

A lot of people here (including me) are buying it even in retirement accounts because of the current discount of 7%.  If gold rises and that discount goes to zero (or even a premium), you'll get an extra 7% bump added to your winnings.

sophie wrote: GTU has a lag compared to the gold index price.  It runs at a discount when few people are buying (relative to sellers), and at a premium when there is high demand for gold.  So it does not necessarily track gold perfectly on a day to day basis.

A lot of people here (including me) are buying it even in retirement accounts because of the current discount of 7%.  If gold rises and that discount goes to zero (or even a premium), you'll get an extra 7% bump added to your winnings.

Right, and furthermore the discount can't grow indefinitely because there is some mechanism for cashing out if it does. They actually called me to discuss that but I was on a very important call and couldn't pick up. I need to call them back about how that works...

Here's a comparison of GTU and GLD.  It seems to me that GTU is tracking GLD pretty well.

[img width=500]http://i60.tinypic.com/264n8yo.jpg[/img]

Stuper1, why are you using Internet Exploder!?!

The last release or two of IE have, somewhat surprisingly, been pretty good.

IE is the only browser my employer allows on its computers, and they haven't upgraded in a long time, so we're stuck with an old version.  I use Chrome at home thanks to your suggestion, and I'm much happier.

By the way, I should have pointed out that for the PP, GTU may be better than GLD due to the discount/premium thingy.  When gold is riding high and you're ready to sell some to rebalance, it will likely be at a premium, so you will get a better selling price.  When gold is low, and you're rebalancing into it, it will likely be at a discount, so you will get a better buying price.  Of course, in practice it won't always work exactly like the theory, but it shouldn't be too far off.