Today was an exciting one indeed in the precious metals markets! Gold set a new all-time closing high of $1,456.80, demolishing the previous high of $1,437.60, set way back on March 23rd of this year. Silver blew another 31-year high today, marking the 5th consecutive day of post-Hunt record setting, closing at $39.28. Over the past two days, gold has gained 1.92% and silver 3.73%, while the S&P 500 has averaged a 0.02% gain.
Today also marks an important milestone for us and our hypothetical investments... Today is the first day that our precious metals investments have become profitable!
Now I know that some of you are saying, "Big deal, your Vanguard investments have been profitable almost all along!", and while this is technically true, it ignores the fundamental reality of our investments. The reality is, we took an automatic 5% hit on our precious metals due to broker premiums, while no such premiums were charged on the shares of our Vanguard 500 fund. So, over the course of the past 23 days, while our Vanguard 500 fund has appreciated 2.4%, our precious metals have appreciated 5.6%, more than double the appreciation of our Vanguard 500 shares.
Way back when this blog first started, I predicted that our precious metals would overtake our Vanguard 500 index investment by the 2nd week of April. How's my prediction doing so far? Did you think I was pulling a random date out of a hat? The truth is, I've been analyzing the price movements of precious metals versus the stock market for a long time, and I've developed a pretty good ability to forecast emerging trends. My tweets from last week precisely predicted the movements of gold and silver this week, although admittedly I was slightly off in that I thought Tuesday would bring a higher percent gain for gold and silver than Monday, when in fact only gold posted a higher gain on Tuesday than Monday. All in all though, I was pretty much spot-on -- I predicted a gold close of just under $1450 and a close in silver just under $40.
Okay, I think this is enough shameless self-indulgence for one day. Although I'd love nothing more than to spice this post up with lots of links to articles, charts, quotes, and the like, I simply don't have the time, so the numbers will have to suffice.
I also wanted to add that you should feel free to add any questions or comments to any posts you see -- you can do so anonymously -- or send me an email (pm.vs.vfinx@gmail.com) if you'd prefer something a little more confidential. I have been getting a lot of traffic from all over the world -- Vietnam, Zimbabwe, Macedonia just to name a few from today -- but I'm genuinely interested in hearing what people have to say.
Now, the numbers:
Results upon NY close of trading -- April 1, 2011:
- Gold closed at $1,456.80 per oz, up $22.30 and 1.55% from yesterday. Silver closed at $39.28 per oz, up $0.69 and 1.79% from yesterday.
- VFINX closed at $122.76 per share, down $0.02 and -0.02% from yesterday.
Investment #1, Precious Metals:
- Percent return for the day: 1.68%
- Profit for the day: $1,656.15
- Total percent return: 0.6%
- Total profit: $596.38
Investment #2, Vanguard 500 Index:
- Percent return for the day: -0.02%
- Profit for the day: $-16.68
- Total percent return: 2.4%
- Total profit: $2,426.94
Advantage: Vanguard 500 Index, by $1,863.68
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