Roger Nusbaum submits: Here is a question I had come in:
Have I missed the boat on precious metals?? It's been up big the last year and many people think this year will be better. What's your opinion? I was in an energy fund, but got out when oil dropped below $60 thinking it was heading to $50, of couse it went back over $60 and has stayed (against most people's opinion - they claim to be experts!!)
I think I am reading someone who trades a lot and makes bets on specific outcomes. Going to zero energy (if I am reading the question correctly) is a big bet. Reducing or tweaking exposure is not so risky, but zero is tough. A lot of the oil stocks I follow and own have had big moves of late.
The reader seems to care more about gold right now and wonders if he missed the move. This is a tough question. For the last few months I have made a couple of decent short term calls on gold on the RealMoney columnist conversation feature. My most recent comment was on December 15 (sub. req.) when gold was around $503 and I thought a trading bottom had been put in.
Obviously there is more short term risk up here above $550. If you are trying to find a trade for the next few weeks I doubt it will be a lot higher in that time period. At a minimum I think gold needs to go sideways or correct before it is tradeable again.
To be clear, all my clients have exposure and I have no plans to get aggressive with trading gold. I view gold as an asset class that has a low correlation to US stocks. That gold is up a lot now does not change the correlation. I bought GLD last week for a couple of new accounts. I have no idea if their entry point will be good or not but it is an important asset class that has a role in all accounts I manage.
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