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In honor of Black History Month, for my next few posts I am going to release some of my core positions, like Novagold, and how they got there. I have received questions from a few readers over time which circle around -- "How does someone invest like how I write here?" At the top of each post, you'll find the basic building blocks to get you to where you need to be -- use the links to invest in yourself and your family. You can't build a meaningful investment portfolio without a consistent source of income - like a job, a budget (that allows you to SAVE capital or funds for your investments), opening a brokerage account (to manage your investments), and physical, mental, and spiritual fitness (that allows you set meaningful goals).
As your personal finance coach, I can't begin to help you on the march to freedom without these things in place. For example, I have a friend who was a landlord and rents their property to a tenant. The lease had lapsed and the tenant was stalling each month by asking for extensions and stating they had an interest in buying the property. Like a personal trainer, I tried to coach this person by asking them what goals did they set for themselves? Even more simply, what is in the best interests for you and your family?? I was surprised by the pause in response, but by asking this one question it became a lot more clear what needed to be done. Put your goals first and if selling your property is best for your family's future -- get it done.
NovaGold
Why did I invest in Gold? Well I have been investing in gold since 2008. One thing I learned during that rough time period for America was that Gold is a safe haven. Gold, like other metals and Crypto Currencies, is not a currency backed by a government which can purposefully be inflated and deflated. So in 2008, the market was on the path to being broke so the Federal Reserve decided to pump the economy full of money. Gold is a good asset to bet that it's value may rise if you think the dollar value is being deflated (by the Fed pumping the economy full of money).
So why in the world is Gold doing well when we are arguably in the best economic period some claim America has seen. Well #followthemoney -- Because the economy is doing fairly well, I was preparing to exit my Gold position. The Fed doesn't need to deflate (pump money into an economy doing well) so I anticipated Gold was NOT going to do well. The strange thing that has happened in the last year is that the Trump Administration has signaled for the Fed to juice or pump the economy with money -- even while its at record low unemployment. That's a signal for me as an investor that something is wrong with this thesis -- either the economy is actually NOT doing as well as we thought OR the Trump administration is artificially manipulating the Fed Reserve to juice the economy further. While you get political -- I prefer to get rich:
1) I invested in Gold over a decade again. Patience is a virtue when you begin to understand the markets. Search my posts and you'll find my previous posts on NovaGold.
2) Look at this chart above. Yes, I finally stopped trying to sell my Gold position in NovaGold and let it run. If the Fed is juicing the economy, the Wall Street world hear's the signal "The Economy is NOT as strong as we believe... when the Fed lowers or does not raise interest rates".
3) The prudent side in me says, I believe the data coming out of our government and the economy is doing well. But then I can't explain why the Fed is not raising interest rates...except coming to the conclusion that they feel coerced into keeping rates low during a period of record low unemployment. So similar to my Sprint trade, I'm just going to follow the money...why guess that the government is going to do the right thing.
Final Summary: Gold runs higher as the economy cannot reach 3% GDP growth even with the Fed juicing the market, and the tax cut boost. But new entrants into the Gold space, be careful...it has run up very fast but with fears of coronavirus, the 2020 US Presidential Elections it could run even further.
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