Will stocks disfavor an all left-wing administration as it relates to gold diversification?
*Dow Theory Letters, by Richard Russell, November 4, 2008:
"If a president and the Senate and the Congress are all dominated by
one political party, the odds are that many new government regulations
will be passed. The market prefers a president and Congress with
opposing parties on the thesis that the fewer regulations that are
passed, the less government there will be to interfere with the free
markets. In other words, the less government, the better the markets
Remember this one, 'I'm from the government, and I'm here to help you.' Answer -- 'Do me a favor, don't help me.'"
"Dow/gold ratio -- Back in July, 1999, one share of the Dow would
buy a big 44 ounces of gold. When the ratio dropped below the rising
red trendline, the equation reversed in favor of gold. Today, one share
of the Dow will buy only 12.8 ounces of gold. The ratio is saying, own
gold, not the Dow. I expect the some day in the future the ratio will
again drop down to the 2 (green) level shown on the chart. At what
price might the Dow and gold cross? How about 3,000?"
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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