| There are plenty of reasons why Gold is the | | | | longer-term, bearish stance on gold. Just as oil hit |
| wrong place to invest at this particular moment in | | | | its high of nearly $150 in 2007 and remains more |
| investment history. For starters, the largest holder | | | | than 40% below that high today, it seems |
| of gold, the metal, is not the various countries in | | | | evident that when gold starts to pull back, it too |
| their formidable reserves. Instead, Exchange | | | | might take some time to return to the recent |
| Traded Funds (ETF) are the largest owners of | | | | highs (in fact, in the 1990's, it seemed gold would |
| gold. This means that countries were able to | | | | never tough the $400 level again, yet here we |
| offload this precious metal at an equally precious | | | | are). |
| profit because retail investors were happy to pay | | | | One way to capitalize on the long-term negative |
| the premiums they wanted. In return, large | | | | returns that gold is expected to deliver in the |
| gold-holding countries like China were able to | | | | future, investors can invest in inverse exchange |
| reinvest their new wealth in US Treasuries at | | | | traded funds. By investing in inverse exchange |
| rates that make even the most uninvolved | | | | traded funds, investors are essentially playing the |
| taxpayer nervous. | | | | odds that gold will depreciate in value. |
| Aside from the fact that retail investors, through | | | | Understanding of course that gold will not drop |
| exchange traded funds, hold so much gold, there | | | | overnight, some investors might become anxious |
| is a point in the overall equity market where | | | | with the little movement that such funds deliver, |
| investors see the premium charged and limited | | | | but just as surely as gold reached beyond $1,100 |
| upside potential in gold and realize that even after | | | | per ounce, it will also dip below that same $1,000 |
| some form of recovery, equities are still cheaper. | | | | level again in the future. The question, of course, |
| This has slowly been making itself apparent as | | | | is when. |
| gold as edged a little lower from its all-time highs | | | | With the right amount of patience and a |
| and more money has started flowing into the | | | | long-term strategy, investors could incorporate a |
| equity markets - which are a lot more liquid and | | | | bearish gold investment with other securities that |
| cheaper. | | | | are currently poised to rebound in the long-term, |
| However, there are some options for people who | | | | such as some equities that are currently out of |
| want to play the gold game. Unfortunately, | | | | favor. After all, contrarian investing has a history |
| however, those options involve taking a | | | | of making certain investors very rich. |