Saturday, October 2, 2010

The Gold Mania Stage

Pretty interesting article on how the gold mania might play out.

You log on to your brokerage account for the third time that day and see your precious metal portfolio has doubled from last week. Gold and silver stocks have been screaming upward for weeks. Everyone around you is panicking from runaway inflation and desperate to get their hands on any form of gold or silver. It's exhilarating and frightening in the same breath. Welcome to the mania.

The key to making the big money in a bull market is staying with the trend even during times when the price drops and when everything you read says get out. This is why it is important to study history and previous market cycles to understand the psychology of mania phases in bull markets. Gold is currently overbought and we are seeing articles about how this is the top. They are wrong.

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