Middle of the Road Expert Advice

Why gold prices will keep rising

Safety-seeking investors are pouring money into gold despite prices that, though lower recently, remain near historic highs. The more we worry, the higher gold will go.

Buy high, sell higher?

I wouldn't plan on holding a significant gold stake forever, but I am envisioning holding it for years, because inflation is hard to eradicate once it begins to bite.

If you can't plan on holding it forever, then it is probably overpriced. That's a general rule of thumb of mine.

Let's see what else he's told us to do before we make a serious decision about it though.

December 16, 2008
Now is the perfect time to invest

It's tempting to stay on the sidelines of a turbulent stock market, but you should take advantage of today's rock-bottom prices. Here's why -- and how.

The DJIA closed that day at 8,924.14. Perhaps it was not the perfect time to invest after all. It just closed at 6,726.02. That's a 25% loss.

February 26, 2008
Financial stocks: The stars of 2008?

You know U.S. financial stocks are dirt cheap when Charles Lahr starts buying them. And that's what he's doing.

I didn't know that.

I couldn't begin to figure that out either, which is why I would approach this sector via an actively managed mutual fund. Managers who have demonstrated great skill in finding the group's best names include Lahr and Rollingson, as well as Jeff Arricale of T. Rowe Price Financial Services (PRISX).

On February 26, 2008, the price of PRISX was $15.87. Today it is $6.95. That's a 56% loss. The 26 cent dividend paid in December of 2008 did offset a very small portion of that loss though. Hurray.

February 19, 2008
Real-estate funds look cheap now

Since Dec. 19, when I closed the books for 2007 on my model portfolio of exchange-traded funds, the portfolio has sagged 5.6%. But iShares Cohen & Steers Realty Majors (ICF, news, msgs), the real-estate ETF I hold in that portfolio, is down only 1.4%.

...

Well, I'm no better at calling bottoms than Vinocur -- or than Bernard Baruch, whom Vinocur was quoting with his comment on liars and fools. REIT funds are yielding more than cash, and they're not making any more of the sector's raw material, land.

ICF closed at $75.13 on February 19, 2008. It closed today at $25.87. That's a 66% loss. To offset a very small portion of that loss it did pay a $0.766 dividend in June and a $1.023 dividend in December. Hurray.

January 8, 2008
How to invest where the oil is

Of that $100 we're spending for a barrel of oil these days, $10 goes to Saudi Arabia and $20-plus goes to its neighbors in Africa and the Middle East, according to the International Energy Agency.

You can get some of that money back through a new mutual fund, T. Rowe Price Africa & Middle East (TRAMX).

TRAMX closed at $13.44 on January 8, 2008. Today it closed at $4.26. That's a 68% loss. In hindsight, it seems that you could not get some of that money back after all. There weren't even any dividends.

In summary, he's offered poor advice on common stocks, financial stocks, real estate, and oil based on what I've read here. Perhaps his luck will change with gold.

The bull market in heckling continues. I honestly don't mean to be mean. It just drives me nuts that poor advice can be offered without any consequences. The "You know U.S. financial stocks are dirt cheap " quote really bothered me. Nobody knows (myself included) but it takes hindsight to actually prove it. So here I am, offering 20/20 hindsight in hopes that somebody, somewhere will at least question the advice that's offered.