Tag Archives: gold

Paragon Advised Investors To Consider Alternatives to Treasury Bills

Posted May 17, 2012 by admin. tags:Tags: , , , ,
Gravel road up the mountain

Provo, Utah- Paragon Wealth Management’s financial advisers encouraged investors to consider alternatives to treasury bills until rates move back up.

“Treasury bills yield nothing,” said Dave Young, president and founder of Paragon Wealth Management. “Bonds and gold could have significant risk at these levels, which are near all-time highs. Both are owned for safety but ironically carry significant downside risk going forward. A home makes some sense because values are low, but it’s hard to get overly excited when a home’s 50-year return is half that of stocks.”

Young said it could be better to follow a proven investment strategy that invests in stocks. He said stocks have gotten the best returns long-term, even though the last 12 years have been extremely difficult in the stock market.

“Stocks are currently the most beat up, out of favor and undervalued of the five asset classes, which makes them even more compelling,” said Young.

Paragon’s wealth managers have been investing in stocks since they opened their doors in 1986. Paragon’s growth portfolio, Top Flight, has generated a total return of 418.55 percent versus 86.96 percent for the S&P 500 from its inception on January 1, 1998 through March 31, 2012. Its compound annual return is 12.32 percent versus 4.52 percent for the S&P 500 during that time period. (Visit www.paragonwealth.com to see complete track record and full disclosures).

“Even the best managers have a tough time staying ahead of the markets,” said Dave Young. “Since the market bottom in March 2009, the legendary Warren Buffett is up only  44 percent versus 80 percent for the S&P 500. Another high profile investor, Jim Cramer of CNBC’s actual track record is surprisingly dismal. If you had followed his advice over the past 10 years, you would have earned only 1.68 percent compounded per year.”

Disclaimer
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

Gold Falls 5% In A Day!

Posted March 1, 2012 by admin. tags:Tags: ,
Gold egg

Written by Nathan White, Chief Investment Officer, Paragon Wealth Management

The price of gold fell over $90 today to close just below $1700/ounce.  That would be the same as the Dow falling 650 points! Moves like this highlight my view of the risk inherent in owning gold at these prices.  The fall was due to comments by Fed Chairman Bernanke before Congress today where he indicated that QE3 will probably not be needed.  Initially many thought that the downward move was just a kneejerk reaction but then it continued down.  What I find interesting is that many gold bugs (i.e., people who love gold)  tend to despise the Federal Reserve and its actions or existence and buy gold to protect themselves.  However, after they have bought gold they then have a vested interest in the Fed continuing the actions that they fundamentally disagree with!  Talk about irony.  So when the Fed hints that they won’t be pumping in as much money through QE actions – whoosh, down goes the price of gold.

I for one am glad to see the Fed not continue another program like QE that just serves to distort market prices in my opinion.  I don’t want any more QE’s as I think the economy can stand on its own. Although I’m very worried about future inflation I don’t think gold would be the best hedge as it has already priced in significant inflation.  I’m worried about how the Fed will eventually unwind its massive balance sheet and the consequences that would follow.  This unwinding would be a tightening of monetary policy and bad for gold.  Gold has been a major beneficiary of the historic easy-money actions of the Fed but at this point the Fed is mostly out of ammo and its actions are producing fewer and fewer marginal gains which are not worth the cost.  It’s like the junkie who needs to keep taking more and more to get a high and you know how that story ends.  Let’s hope the economy gets stable enough that it will be able to withstand the potential ramifications of this unwinding….

Disclaimer

 

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.  

What About Gold?

Posted March 31, 2011 by admin. tags:Tags: , , ,
Gold Coins

photo by motoyen

Written by Dave Young, President of Paragon

We are regularly asked our opinion on whether or not investors should buy gold. We’ve written about it in the past, but I wanted to give you an update of where we stand now.

Gold is being promoted on a host of television shows. There are a nonstop barrage of advertising promoting it.

Usually buying gold through the brokers that are pitching it on TV is the most expensive way to buy it. If I wanted to buy gold, I wouldn’t buy it through those costly pitchmen.

For the record, at Paragon we are not buying gold right now. That doesn’t mean we are anti-gold, it just means we don’t want to buy it right now. Over the years we have bought and sold gold many times when the valuations made sense.

Our reluctance to buy gold doesn’t mean it won’t keep going up from these already stretched levels. Once a trend establishes itself, it can keep running as long as people keep buying.

An upward trend is not a reflection of value, it simply means there are more buyers than sellers. Right now there seems to be no shortage of buyers.

We aren’t buying gold right now because we cannot justify that it is worth what it is selling for. It’s valuations are severely stretched.

Fear is driving gold purchases.

There is uncertainty in the Middle East, issues with Libya, European debt issues, endless U.S. Government spending and the all encompassing fear of inflation.

At Paragon, we make money by buying early in trends and selling when the trends start to roll over. Most trends in the market last between six and 24 months. While we don’t know how much further gold will run before it rolls over, we do know that it is not early in its trend. We also know that it is anything but cheap.

The only way I would buy gold right now would be for a short-term trading play. However, if I really wanted to make a short-term trading play on metals, I would buy silver instead of gold. It tends to follow the same trends as gold, but move a little harder up and down. Bottom line, I would not take a long-term position in gold at these levels.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

Should You Buy Gold?

Posted December 17, 2009 by admin. tags:Tags: , ,
GOLD!


photo by motoyen

Written by Nathan White, CFA

Several people have asked me about gold lately.

They are curious as to whether they should buy it or not. After all, it is hitting new highs. It seems like they all know someone who bought it around $300 an ounce.

I hear radio advertisements all the time that tell people to buy gold because of- the usual litany of fears (i.e., dollar crash, inflation, etc.) The last time I heard things like this was during the tech bubble when everyone wanted Internet gold.

What happened to gold investors last time people were buying for today’s reasons?

A recent article from Bloomberg.com by Nicholas Larkin and Millie Munshi provided some interesting insights. Those who bought near the peak in January 1980 on an inflation-adjusted basis are still 79 percent away from getting their money back. That is about a 44 percent return over 30 years. The average U.S. checking account rose about 92 percent over the same period with stocks and bonds doing much better.

Gold pays no interest, has virtually no industrial use, and  you must pay storage fees to hold it.

It is a purely speculative asset which ironically attracts some of the most traditionally conservative type of investors — go figure.

Do not get me wrong, I am not anti-gold, but at this point, the reward is not worth the risk.

It could keep going all the way to $2,000 an ounce for all I know making me look like a fool for writing this, but the contrarian in me does not like to buy high.

Gold is pricing in all of the fears for which people are buying it. At this point, you are just hoping some sucker will be willing to pay a higher price than you before the game ends.

I would be selling gold at this point, not buying.

What do you think? We want to hear your feedback.

Paragon Wealth Management
is a provider of managed portfolios for individuals and institutions.
Although the information included in this report has been obtained from
sources Paragon believes to be reliable, we do not guarantee its
accuracy.  All opinions and estimates included in this report
constitute the judgment as of the dates indicated and are subject to
change without notice.  This report is for informational purposes only
and is not intended as an offer or solicitation with respect to the
purchase or sale of any security.  Past performance is not a guarantee
of future results.

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