Platinum Passes Gold in the Precious Metals Olympics

With two great metals like gold and platinum trading at such close values, we at RealMoneyReport.com (sponsored by Leland National Gold Exchange) strongly believe that hard asset investors should rejoice in the fact that they now have TWO major metals to protect their hard-earned cash with.

So far this year, platinum has made gains greater than 20% and is currently trading at $1,675 an ounce while gold dropped just below $1,650 to rest on prior support at the $1,641 level. It's somewhat historical I must admit - seeing as how platinum used to trade $200 below gold, but is now about $33 in the lead.

I still think that platinum has more room and the fact that it's trading in such close proximity to gold prices will create a minor, albeit noticeable, conflict or race. More and more investors that are looking into safe haven instruments will begin to notice that there really is another contender.

And to that I say, get in early! Folks, I know that feeling a lot of you get when you're looking at a gold or any stock chart. "Wow look at how high it's going! I should get in and ride this momentum!" Hmmm. Have you ever heard of that statement/rumor that goes something like, "90% of traders lose money, 5% break even and 5% make money?" Well the fact of the matter is that 90% of traders like to get in on something AFTER seeing that it has gone up so much. In the future I'll diagram this out with numbers and specifics to really drive the point home, but for now, I just want to get a simple mathematical concept through to you...

Who do you think would end up with more money in the following scenario? When a tradable instrument, like gold or platinum for example, is trending up in the LONG TERM (several years at least) we have two people. The first one buys more of something every time he/she sees its price experience a major increase. The second one buys only after significant drops. Again, assuming that the overall trend is positive, it's actually the one who buys on the big dips. I know it almost sounds too simple, but I'm trying to get you to be in that top 10% at least - and maybe even that 5% if you throw in some extra know-how and experience (so please check back with us often).

I saw platinum's $200 discount from gold as an opportunity to get in on something while it was cheap and so I loaded up on it quite some time ago. It's Warren Buffettology 101. Buying a stock at 50 cents a share and watching it grow to a buck is a 100% increase, whereas getting in after it rises to 66 cents a share is only a 50% increase. Just 16 cents made the gain drop by 50%!

Currently, platinum's $200 difference is closed but I'm STILL not going to sell it off. Instead, I'm going to wait for another discount in order to add even more to my position. And now that gold has gotten rather cheap this week, below $1,650 an ounce, I'm going to take advantage of this new discount. In the last article, I mentioned that one should look into possibly getting more platinum and I still stand by that. But as for exactly "when" I'm going to add more to my positions for either gold or platinum (or silver and any other precious metal for that matter), I want to watch for some kind of special discount package or sale - and by sale I mean any recent moderate or major price dip. So I heard there was a 'sale' on gold this week...

Be safe, be wealthy and above all else, be happy.

- Mitch

RealMoneyReport.com

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