 Casey Files:
Where Was Your Money in
2008?
Doug Hornig
co-editor of BIG
GOLD, from Casey Research
Jan 12, 2009
2008 is now in the rear-view
mirror, with virtually every investor shouting "Good riddance!"
and praying for a better year to come. Forget about making
money, just keeping your head above water was an accomplishment
over the past twelve months.
Consider the statistics (1/2/08
vs. 12/31/08):
Housing - down 18% nationally, by the Case-Shiller
index, and 30% or more in most major metropolitan areas.
Domestic stocks? Nope. The Dow Jones Industrial Average
- down 33%; Dow Utilities - down 30%; Dow Transports - down 21%.
S&P 500 - down 38%. NASDAQ - down 40%. And if you were unfortunate
enough to have invested in a financial-sector ETF, you lost at
least 55%.
Foreign stocks? The Vanguard Emerging Markets Fund,
a typical example, came in at minus 55%.
Bonds didn't fare well, either, with the yield on
10-year Treasuries dropping 42%, and 30-year T-Bonds off 38%.
Energy. Uh-oh. Crude oil - down 59%. Natural gas -
down 37%.
Industrial metals took a whacking, with copper down
55%, nickel 56%, and aluminum 37%.
Food did a little better than most, which isn't saying
a whole lot. Corn - down 17%; wheat - down 24%; live cattle -
down 15%.
Enough. You get the idea. Every
asset was mired firmly in the red in 2008, right?
Actually, no. The single exception
was gold, which was up 5.5%. A modest gain in most times, but
a phenomenal performance for a year where everything else tanked.
And if you managed to invest
something other than U.S. dollars in the metal, you did even
better. Gold rose 12% in euros, 32% in Canadian or Australian
dollars, and a whopping 44% in British pounds.
Nor is this an isolated phenomenon.
In 2008, gold posted its eighth straight yearly advance. Since
the beginning of 2001, it has averaged a better than 16%
annual gain vs. the U.S. dollar, 11% vs. the euro, and 17% vs.
sterling.
Your financial advisor likely
tells you to invest in the stock market and be patient, because
over the long haul stocks will yield an average yearly return
of 9-10%. Well, maybe so. But it sure depends on how generous
your time frame is.
Over the past eight years,
gold has added 215% (in U.S. dollars). During the same period,
the S&P 500 lost 22%. The DJIA? Down 11%. In
order to show a profit with a simple buy-and-hold strategy (ignoring
all rallies and dips), you'd have to go back to early 1999 for
the Dow, and 1997 for the S&P!
Where was your money in 2008?
Or '07? Or ...?
If you're a BIG
GOLD subscriber, a significant portion of your portfolio
was in physical gold and paper proxies tied to the gold price.
Yes, the gold-producing companies
that we follow in BIG GOLD did poorly in 2008, as the frenzied
stock sell-off spared neither market nor sector, across the globe.
But we held on through the storm, and the miners have rebounded
sharply in the past month. We expect that they will be stellar
performers in 2009, as the coming inflation that's baked into
the American economic cake begins to break out.
And despite the turmoil of
'08, our readers always had something to cushion the blow. Gold.
We advised buying it and taking it into their physical possession.
When a severe shortage of coins and small bullion bars developed
in the second half of the year and premiums skyrocketed, we showed
subscribers where to buy at the lowest possible markup. For those
with sufficient means, we provided detailed instructions for
purchasing 100-oz. gold bars on the New York Comex.
2008 was a rough year, for
everyone. But it's gone, and if you held gold and its proxies,
you did better than most.
The important question now
is: where should your money be in 2009? That's the question we
address every month in BIG
GOLD. Try a risk-free 3-month trial subscription with 100%
money-back guarantee... learn
more here.
Jan 7, 2009
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