Gold's Happy Year

Happy New Year!

I hope you took a nice break for Christmas and New Year's. It's good to get away; helps you take a fresh look at things. Besides, not too much happened while the world was in "holiday-mode."

Well, one thing that did happen was that gold hit a new record high. And what's interesting here is that the gold bull market that started about 10 years ago continues to be a kind of "stealth" bull market. Just imagine the media frenzy (and probably the retail buying frenzy) if stocks had closed higher for 10 years in a row. People would be selling their furniture to raise money to buy stocks. But you don't see that with gold.

With gold, all you hear about is how it's in a bubble. There's no retail buying frenzy going on. In fact, most institutional portfolios still don't hold any gold. The few that do typically have a couple percentage points in gold with maybe some silver or other precious metals. I doubt - with maybe a few exceptions - that any institutional portfolios hold more than a 5% position. And if they had a 5% position that increase over the last year, I'll bet they're looking to "trim" their position right now.

Yes, it certainly was a happy year for gold.

Of course, what you'll probably hear about is how the S&P was up 12.8% last year and the Dow was up - I think - about 11%. Plus, you're already hearing how the economy should be much stronger than originally anticipated - which, of course, will mean the stock market will have a really strong year. At least that's what you'll hear. Whether it happens or not is another story.

As for gold, using the ETF "GLD" as a proxy for the price of gold, it turns out gold went up around 29.3% But you probably won't hear much about that.

In any case, it's good to be alive and well in 2011.