I built my career on three words…
I didn’t think I’d be the kind of guy with a tagline or a catchphrase. But today, I am.
When I speak at conferences, the audience says them with me.
If you don’t know the words yet, you will soon. They’re the guiding philosophy behind how I invest.
I’ve used these three simple words to define three investment rules.
These are the three things I always look for when investing. And they’ve shaped my career.
Today, I’ll share my guiding philosophy – and one investment it points to right now.
Let me explain…
Before I put money to work, I want to find an investment that is cheap, hated, and in the start of an uptrend.
This strategy is contrarian by design. It means buying after investors have given up… when prices have fallen to attractive levels. It also means having the discipline to wait for prices to reverse.
That simple model has been the key to my success. And it’s been responsible for the biggest gains of my career. That includes the calls I’ve made in the gold market, which have been some of the most profitable recommendations for my readers over the years.
Interestingly, these three principles point to gold as a fantastic opportunity right now.
You see, gold has spent the better part of seven years falling in price. It’s down by more than a third over that period. So clearly, the metal is cheap.
Investors also hate the idea of owning gold. And it’s easy to see why.
The precious metal has been in free fall most of 2018, losing roughly 11% of its value since its January peak. And this year’s performance is a continuation of the longer-term trend.
Gold is disaster insurance. It goes up when the global economy goes south. And we haven’t had a disaster in more than a decade.
The result is that investors have moved on to greener pastures… They’ve given up on gold. The metal recently hit its most hated level in 17 years, as I explained in a recent DailyWealth essay.
I love to see this setup. It’s the kind of sentiment extreme that contrarian investors dream of. And right now, it’s kicking off the beginning of an uptrend. Take a look…
Gold has slowly been trending higher since August. The metal is up a little more than 3% since then. And prices appear to be hitting what analysts describe as “higher lows.”
This might not seem like a major rally. But it’s exactly the setup we want to see.
Gold prices have been falling for years. Investors recently hit their most extreme negative sentiment levels in nearly two decades. And now, the price is starting to move back up.
Said another way, gold is cheap and hated… And it’s finally starting an uptrend.
I’ve built my career looking for these kinds of opportunities. It’s how I’ve found my biggest winners. And right now, gold fits this investment philosophy perfectly.
You can get in on this opportunity today by buying shares of the SPDR Gold Shares Fund (GLD). This fund holds physical gold to back its shares… And it’s the easiest way to take a position in gold.
Good investing,
Steve
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Source: Daily Wealth