So… we’ve got $11-$12 pegged as the rich man’s “bargain price” for his silver insurance. What about gold? Where does the rich man step in to buy during a gold decline?
Well, the rich investor tends to look at things from the “long view.” He thinks in terms of years, not months. So let’s consult the long view of gold to find the bargain price for the ultimate financial insurance.
Below is the past five years of the bull market in gold. As you can see, gold tends to jump $200-$300 per ounce when it makes a leg higher. It then declines and moves sideways for months and months. This decline and sideways action serves to shake out and frustrate as many people as possible.
Just five months ago, gold kicked off an incredible $250-an-ounce move that took it above $1,200 an ounce. Its natural decline from this high has all kinds of finance people wetting themselves and grasping for answers. The rich man doesn’t panic. He keeps a chart like this in mind and knows gold could fall down below $900 and still remain in the confines of a bull market. He buys more.
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