As an investor, you should always know what your objectives are. One of the biggest traps investors fall into is buying a gold position that has little or no relationship to his or her objectives. Gold is not for everyone. Buying gold is usually used as an insurance policy in case other investments such as stocks go down.

Gold is in a bull market right now because its core fundamentals are so outstanding. It is also doing well because the stock market is tanking. You see, that is the “insurance” part of gold. When stocks go down, gold often goes up. A position in gold will often offset your losses in the stock market in troubled times.

The price of gold may jump up to thousands of dollars per ounce in the current rally or it may struggle and fall lower. No one knows for sure even if they pretend to. One thing is for sure: if the stock market continues to fall, things will look good for the gold investor. Gold is the ultimate alternative investment because it is tangible.

Many people, including the die hard stock investors, often still see gold as the most undervalued asset group in a standard portfolio mix. In general, gold becomes more desirable in times of banking failures and tough economic times. Also, like all investments, gold becomes more attractive to more people the higher it goes. People don’t seem to want to miss out and that is why both gold and stocks tend to go up too high before they fall back.

Before you invest in gold, you should carefully consider what percentage of your overall portfolio you wish to risk in gold-related investments and the current price of gold. If you are thinking about investing in gold, it is worth giving the same consideration to your purchase as you would to any other investment. When you buy gold investments, you lower risk in your investment portfolio.

As more investors realize that gold is a great way to profit in today’s uncertain climate, more fund-makers have been happy to supply the means with which to buy gold. There is a whole world of excellent alternatives out there for investors who wish to invest in gold. Just be sure you understand what your gold objectives are before you allocate too much of your portfolio towards it. Buying gold as an investment might be a great addition to any portfolio but only in the right amounts. Putting too much of your net worth into gold would be the same as gambling.

The stock market and the economy are in the midst of very tough times. Everywhere you turn there is bad news about the economy. You hear it on the radio, TV, in newspapers, and bars and pubs. The Dow goes down 500 one day, up 300 the next, and then down 700 the day after that. Investors might be accurately depicted as being in panic mode. Everything about the economy seems unsure right now.

Gold is usually bought as a hedge against these uncertain times. If there is one asset you can count on, it has always been gold. Gold has never gone to zero in value and usually when the economy is in trouble and stocks are going down, gold is seen as a safe haven. Buying gold as an investment usually works like an insurance policy against a tough economy. It makes one wonder why, in the midst of all this turmoil and uncertainty, gold has not gone up?

Lately, when stocks have been taking a dive, all stocks have been going down, including gold stocks. Usually it is more of a one or the other type of thing. This might be happening for several reasons. First, when the dollar is weak, and it has been very weak in recent years, gold goes up. Lately though, the dollar has been making a bit of a comback which might be contributing to the decline of the price of gold.

Another reason why gold is not going up may be because of the activity of banks and hedge fund managers that are in trouble. Because they have made a lot of bad bets which has led to this weakened economy and stock market panic, many investors want their money right now. These financial institutions may be having to sell their good investments such as gold in order to cover their losses. This continuing selling of gold will of course drive the current price of gold down. As long as enough of these hedge fund managers are selling, gold will continue to stay at current levels.

These are some of the reasons why gold has been a disappointing investment in recent months. If you are like most people, it is nice to see at least one thing in your portfolio go up as the rest of your investments go down. Gold and gold stock has always been that thing up until now and hopefully it will make a comback soon.

It would be difficult to imagine a more interesting and chaotic time in the financial markets.

We’re seeing stock market characteristics (daily ranges, reversal patterns, etc.) that are literally unprecedented. The volatility (as measured by Average True Range or ATR) of almost every major trading instrument is at all time highs. It doesn’t matter if you’re looking at stock indexes, bonds, oil, gold, currencies, etc. It seems that the only broad groups of instruments not trading at their highest volatilities ever are the smaller commodities that don’t have big hedge fund and institutional interest- things like coffee and orange juice.

This volatility expansion is significant for several reasons:

It is broad-reaching. As mentioned above, it is hitting practically every traded instrument.

It is persistent. The markets are no strangers to volatility spikes. We see them come and go when particularly juicy reasons for fear or greed enter the markets. But this volatility explosion has not subsided. Depending on how you measure “persistence”; the volatility “spike” has lasted four to six weeks, not just for a few days.

It is huge. Back in April of 2000, we made the previous volatility highs when the Internet bubble started to collapse. Then volatility (as measured by 14 day ATR) was 3.0% of price. Last Wednesday, this same ratio showed ATR at an astonishing 8.3% of price!!

To punctuate the truly wild nature of the recent market volatility-here’s an interesting market tidbit: today is a “Fed Day” (FOMC meeting announcement) and after dropping both key rates by 50 basis points, it looks like the market will have a day within only 2/3rds of its recent range!

I think that the market is giving us some really important information through this language of high volatility. The message is this: the uncertainty of where the markets are heading next has never been higher. With the slightest whiff of negative news, the market free falls. When even a shimmer of hope comes along (like the Fed strongly hinting that the rate cut was real yesterday, sending the markets up 10%), the markets jump through the roof.

It’s like a cat on a hot tin roof… after drinking a can of Red Bull. Every move is over exaggerated.

One of the questions that I get most often is, “when will the stock market return to some sense of normalcy?” It is hard to predict this, of course. But one key indicator will be when the volatility settles way down from its current unprecedented highs. It’s okay if the market is directional; I don’t think we’ll see a traditional basing / consolidation period from here. But what IS needed is a sense that the markets don’t jump every time someone whispers, “Boo”. And a volatility contraction will be a good (and maybe the best) indication that this is happening.

Ever considered solo IRAs? We live in scary economic times. You never know what the headlines will read the next day. Will the stock market be in the basement again? Is another large bank in trouble? What will happen to my investments? Will I ever be able to retire?

Or, maybe you are already a casualty of our crumbling economy. Did you lose your job? Has your company been taken over? Does your company even offer a retirement plan? What is your future going to be like if you are unable to prepare for it now?

One way to gain control over your future is to invest in an individual retirement account. Solo IRAS put you in charge of your investments. Like company sponsored 401K plans, IRAS represent huge tax savings.

Before we go on with our discussion about how an IRA can give you control over your future, let’s take a look at some of the more common types of solo IRAS:

A traditional IRA allows you set aside up to $5000 a year, if you are under 50. If you are already over 50 you can deposit up to $6000 per year. If your company does not offer a retirement plan, you may be able to write off your contributions on your taxes.

Rollover IRA’s can be created if you lose your job or your company has been taken over by another and you have a 401k plan, or if decide to transfer your money from an existing IRA or 401k plan to one that has a better yield. This type of IRA protects your money from the huge penalties that can be charged if you withdraw your money before you are 59 .

Roth IRAS work a little differently than other types of solo IRAS. In other IRAS, you are not taxed on your contributions until you withdraw them. On Roth IRAS, you are taxed prior to the money going into the account, but after it has been deposited it becomes tax-free. So, even if you were to withdraw it, there would be no additional taxes. There are special rules to set up one of these types of accounts so you will want to consult a specialist.

With an IRA you make your investment choices. For instance, you can purchase money earning real estate. The profits that you receive go into your retirement account and are not subject to taxation. With property selling at rock bottom prices, you can quickly build up your portfolio. You can also sell properties that are not working out and as long as you put the profit from your sale into the IRA you can avoid penalties. Today’s market is ripe for this kind of investment.

Having a choice about where your money goes and how it is invested, gives you the power to control your destiny. Isn’t it time that you thought about investing in one of the many different types of Solo IRAS?

With the financial news being as bad as is it today, people are wondering why one should even bother investing in the stock market  Isn’t that just putting your money at risk?

Yes and no.  Of course, to make any money, you have to accept some level of risk, but it doesn’t have to be as much as you think.  The key to weathering the market storms is diversification.  If you spread your wealth across many different asset classes, you will get yourself a lot further than simply investing in individual stocks. 

Having a diverse portfolio will help you be able to weather the ups and downs of the market.  If the asset classes are somewhat unrelated, you will be afforded protection since many classes will move in opposite directions from each other depending on their relationships.  Choosing this asset allocation is responsible for most of your gains and losses in the market.

The easiest way to achieve a diversified assets allocation is to invest with index funds.  Index funds represent a larg segment of the market with a single security that is easy to by and sell.  Index funds make it really easy to pick a target asset allocation and achieve it, greatly reducing your risk.

Another way to reduce risk and maximize return is to do dollar cost averaging when purchasing stocks.  What this means is that you set a fixed amount of money aside each month to buy stocks with.  If the market is up, you’ve earned more money off of the stocks you have.  If the market is down, you just got more stocks for your money.  Since it is impossible to predict the stock market, this approach can really reduce your exposure to risk.

Of course, no investing strategy is risk proof, but using the above strategies get you about as close as you possibly can.  Get a good discount broker, and start investing in the stock market today!