Friday, June 20, 2014

My Precious Metals Positioning So Far

With Gold up 2.5% or $30USD and Silver up 4% or 80c, I thought now might be a good time to fully account for my portfolio that I have invested in gold and silver. They are all listed in SGD and I think that they are all quite liquid with low counterparty risks.

Here is the breakdown of my portfolio exposure so far:

Gold Miners             - 20.3%
Gold Mutal Fund      - 5.7%
Silver CFD               - 0.5%
Physical                    - 3%

Total: 29.5%

I'd like to share a chart of my accumulation of gold mining equities since late December 2013.

I have to admit that I was a bit trigger happy in Feb and I was scared that this was the real breakout and I would not be in position! Since late December until now, I've managed to roughly accumulate my gold miners equity portfolio at an average price of about $24.50 if using the GDX as a proxy. Representing 20% of my portfolio, this is kinda scary, especially when it dipped to 22. However, since my portfolio is quite diversified, the rest of my positions were in-the-money and cushioned the blow so that my total downside was merely 2%!

I think it's a pretty good average price that I've managed to get in so far, especially if you consider the massive range of the GDX. It's low in the past 5 years was on 16 Dec 2013, printing 20.53. The high was back on 5 Sep 2011, printing up 65.80. If it tags those highs, that is a 200+% upside from my current position!

Miners have been in a disgusting and massive bear market, losing 69% from it's peak to it's bottom. I'm blogged about this way back in December 2013 last year in posts like this and this, and I frequently mention the precious metals on and off on my blog.

Sadly, I was out having dinner today when Silver just freaking exploded, so I am unable to enact my Silver plan that I had planned to carry out. Just a week ago I was saying how Silver is looking pretty fine lately and it might be a good time to start stacking again. Can't believe I missed a great entry point.

Anyway, I actually think that 28.5% is a rather large position of my portfolio to be in for just a single niche asset class, however I can see myself adding on dips slowly but surely. I think I have had enough of leverage (since my miners position is pretty large) and I would like to slowly stack myself by buying physical through BullionStar on dips since it is looking a tad overbought. The best case scenario if it consolidates next week along the 200DMA and then resumes an uptrend.

If this is honestly the start of a much bigger rumbling in the future, it is only prudent for me to lock in some on my wealth in precious metals and have my portfolio properly insured. I am aiming for a rough 1:4 Gold and Silver ratio in terms of currency and aiming for at least 5% of my portfolio converted, and the upper limit is to the moon depending how out of control things get.

Gold and silver are silly barbaric relics are they? Hehehe.

1 comment:

  1. Today's update of Epic Research about precious metals says that Silver trading range for the day is 43359-44353.


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