Recap of day 11 (updated)

Good evening, loyal readers.

I'm a little worn out from all of the action today, hopefully I'll catch my second wind and can provide some commentary on what transpired today.

(UPDATED)

Well, today was quite the wild ride in the precious metals market. After starting the day off trading sideways, gold and silver both exploded, gold to a new all-time high and silver to a new all-time post-Hunt Brothers high, before finishing the day on a loss.

It could reasonably be said that the drop in price was simply due to some "profit taking" by investors who felt that these metals had reached a short-term top, and looking at the 24 hour spot chart for gold and silver, you'll notice that gold and silver moved pretty well in tandem on their run ups and respective drops. This is the nature of precious metals -- volatility. A gain of 5% in one day is possible, and just as quickly the next day that gain can vanish. For our purposes, we're not going to concern ourselves with the day-to-day movements of gold and silver except for the sake of curiosity. We're in it for the long-term, if gold loses 5% tomorrow and silver loses 10%, it matters not to us, because the long-term trend is still looking very very good, and according to the Wall Street journal:

"This is a buying opportunity if anything," said Bob Haberkorn, senior market strategist with Lind-Waldock

The only thing that matters is the long-term performance of precious metals, and for the last 10 years the performance has been absolutely rock solid. There's no reason whatsoever to believe that anything will change anytime soon. So good days, bad days; whatever... All that matters is what our metals look like in 6 months, a year, 5 years, 10 years, etc. If you want the stability of small daily price movements, then perhaps the S&P 500 suits you better, you'd just better expect to lose money, because over the past 10 years the S&P 500 has only returned 1.6% and adjusted for inflation, it's had a return of -1%

Meanwhile, the fundamentals of gold and silver remain very strong, and gold and silver's current bull runs will continue unabated, as least as long as U.S. finances rate nearly worst in world, and the U.S. plunges headlong into a debt crisis of nearly unimaginable magnitude.

From CNBC: 

In the Sovereign Fiscal Responsibility Index, the Comeback America Initiative ranked 34 countries according to their ability to meet their financial challenges, and the US finished 28th, said David Walker, head of the organization and former US comptroller general.

Walker predicted the US will have a debt crisis "within the next two to three years" and implored Washington lawmakers to "wake up."

Those who are in the know remain very bullish on gold, and with good reason. Articles such as this one from MSN Money, demonstrate succinctly the fundamentals that will continue to propel gold and silver ever upwards:

"You've got a lot of things that are stacked up in gold's favor right now," argues Adrian Ash, the head of research for BullionVault.com. "Monetary policy is way too loose across the world. . . . This is as bad as the negative real interest rate has been since the 1970s."

Ash says that for every 1% move in gold there is a 1.75% move in silver but that recently silver has outpaced gold five times over. "This is just nuts." Silver is playing catch-up to gold and has been increasingly more appealing to investors as a "cheaper" precious metal.

Ash fervently believes that gold is not a bubble and that people who say it is are "confusing longevity with speed." Gold has been in a bull market for 10 years versus its previous 20-year bear market.

I urge you, dear reader, to explore your investment options beyond those presented by your financial advisor. It never hurts to take an objective look at the alternative, and right now, the alternative continues to outperform Wall Street by a huge margin.

That is all for now, and so I'll leave you with today's numbers:

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Day 11

Results upon NY close of trading -- March 24, 2011:

• Gold closed at $1,430.80 per oz, down $7.30 and -0.51% from yesterday. Silver closed at $37.17 per oz, down $0.25 and -0.67% from yesterday.
• VFINX closed at $120.59 per share, up $0.61 and 0.51% from yesterday.

Investment #1, Precious Metals:

• Percent return for the day: -0.59%
• Profit for the day: $-574.09
• Total percent return: -3.1%
• Total profit: $-3,063.06

Total investment value: $96,858.72

Investment #2, Vanguard 500 Index:

• Percent return for the day: 0.51%
• Profit for the day: $508.74
• Total percent return: 0.6%
• Total profit: $617.16

Total investment value: $100,571.87

Advantage: Vanguard 500 Index, by $3,713.34