Gold Prices

Back on October 16th I talked about a drop in stock values over the course of about two weeks.  In just a couple months, those losses have been re-gained and then some.  Patience is the key and avoiding emotional decisions to sell while values are low will pay dividends over the long haul.

A perfect example of how people get swept up in the "buy high, sell low" pitfall is by too closely watching/listening to foolish prognosticators.  I've mentioned this bonehead before, but it's worth bringing up again to point out the trap that folks can fall into.  His current home page states how the "go to" sectors right now are energy and gold.  Well, these two sectors are at their highest point in years.  Why would one buy these right now?  The window of opportunity has come and gone at this point.  People will hear how great the sector is right now and pour their money into them because they get emotionally caught up in the current media craze only to find out later that it's way too late to make any money in these sectors at this time.

Gold prices are almost double what they were in 2001.  But, very much like the peak of the internet dot.com mania, people are pumping money into gold because it's the "hot" media ticket.  Be careful.

Likewise, take a look at the major energy stocks over the past five years...

Exxon/Mobil

Chevron

British Petroleum

January 2003 was the time to buy energy stocks, not now.  January 2001 was the time to buy gold, not now.