What I find funny about the markets and investors is that we want instant gratification. People want to know every zig, every zag, every up, and every down.
However, where you make money is in the long-term trends.
In 1998, my first book, “Stock Market Panic!” was published. In this book, I noted there would soon be a sea change from equities and industrial stocks into commodities, oil and gas, gold and silver, etc.
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At the time, I looked nuts. The Dow Jones Industrial Average had been rising for 16 years. Gold and oil were 70 percent off their all-time highs and had done nothing for 20 years.
However, here we are years later and gold is now $1,300, up from $250 an ounce, and oil is $90 a barrel. Gold stocks have climbed thousands of percent in price. Therefore, the smart thing to do was to spot the long-term trend and then hold through the trend. However, rather than doing this, most people seem to obsess on the short term.
For example, I see many gold bulls always predicting pullbacks in gold. Or long-term dollar bears talking about rallies in the U.S. dollar. Playing these short-term moves isn’t how you are going to make money.
One of the themes of my latest book, “The Great Super Cycle: Profit from the Coming Inflation and Dollar Devaluation,” is that markets trade in long-term secular cycles that usually last 15 years to 20 years.
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Fundamentally, nothing has changed in the long-term cycle. The U.S. is running record deficits. The news out of Davos was that many countries are now starting to steer away from the dollar. Therefore, we will continue to see weakness in the dollar and strength in commodities and precious metals long-term.
Therefore, if you really want to do well and make money in the markets, spot the long-term trend and don’t overly focus on the short term.
About the Author: David Skarica
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