Market Alert - Selling Bonds, Buying Gold

Following a strong performance from bonds this year, the time has come to start reducing the interest rate sensitivity of the bonds we hold in the Active Asset Allocation model. As a result and as noted in our December 2014 Investor Update posted last week, we are making the following changes to the model portfolio:

  • Reducing the allocation to 5+ Year EU government bonds from 30% to 20%
  • Adding 5% allocation to EU aggregate bonds
  • Adding 5% allocation to EU inflation linked bonds

We are also reducing the allocation to  absolute return bonds from 30% to 20% and increasing the allocation to gold from 20% to 30% ahead of what we expect will be a strong period for precious metals in the months ahead. Our Active Asset Allocator is now positioned 20% equities / 50% bonds* / 30% gold. (Bonds now include euro government, corporate, inflation linked and absolute return bonds).

 
 

To learn more about the full range of investment services available at Secure Investments, please contact Brian by email at brian.delaney@secureinvest.ie or at 086 821 5911.

Market Alert - Precious Metals

The action in the precious metals markets over the last couple of days is suggesting a turn may be just around the corner. On Sunday night, the silver market opened and silver was clocked for -10% in about 5 minutes. Usually when this happens (silver is a small market and can be pushed around by aggressive pit traders) the weakness follows through into the next day's session and the rout typically spreads to the silver miners and across the precious metals sector in general. 

This time however, silver retraced the entire decline and closed +3% on the day and the mining stocks followed suit with across the board gains (Monday 20th May). If this rally sticks over the next few days it could signal that the painful 2+ year correction in the sector is finally at an end. The next leg in the bull market in precious metals could be about to kick off.

The 2-year bear market in silver could be over, which means the next leg of the bull market is about to start and a test of the $50 area is likely.

The 2-year bear market in precious metals is close to ending, which means a challenge of the 2011 all time highs could lie ahead later this year or in 2014.

Market Alert - Precious Metals

The Hulbert Financial Digest recently reported that newsletter writers focused on the precious metals sector are now recommending that investors take a 44% net short position in gold, an all time low. Jason Goepfert at Sentimentrader tracks the data and has posted the following chart this week.

Gold sentiment has reached an all time low

Market Alert - Precious Metals

Investors are betting against the precious metals for first time since 1990

Sentiment levels against the precious metals has reached a historic extreme. Small speculators, for example, are throwing in the towel en masse. For the first time since 1990, small speculators in the futures market are now betting against the precious metals. Small specs have moved from holding a net long position of 85,000  contracts in October 2012 to a net short position today.

Small speculators betting against the precious metals for the first time since 1990.