2. Points To Be Covered
Today:
๏จGold & Treasuries
๏จSlow and Steady vs. Gold
Fever
๏จThe Case for Treasuries
๏จThe ETF Option
๏จThe Bottom Line
๏จMt4 Indicators
3. Gold & Treasuries
๏จ Gold and Treasuries are both considered
safe-haven assets.
๏จ Some correlation between them is clear.
๏จ However, the gold price is correlated with bond
prices, while bond prices are negatively
correlated to yields.
๏จ The lower the price on the bond, the higher
the yield, and vice versa.
4. Key Takeaways
๏จ Gold is often hailed as a hedge against
inflation - increasing in value as the
purchasing power of the dollar declines.
๏จ However, government bonds are more secure
and have also been shown to pay higher rates
when inflation rises, and Treasury TIPS
provide inflation protection built-in.
๏จ Certain ETFs that invest in gold and also hold
on to Treasuries may be the ideal solution for
most investors.
5. Slow and Steady vs. Gold
Fever
๏จ Like any other investment, gold fluctuates in
price.
๏จ Investors may have to wait long stretches to
realize profits.
๏จ Research shows that the majority of investors
enter when gold it's near a peak, meaning
upside it limited and downside is more likely.
๏จ Meanwhile, slow but steady Treasuries provide
less excitement but reliable income.
๏จ The longer the gold is held over Treasuries, the
more painful these opportunity costs can
6. The Case For
Treasuries
๏จ The biggest draw in buying Treasury
bonds instead of gold is that the former locks
in certain returns on investment.
๏จ Prescient investors who saw fit to buy $10,000
in 30-year Treasury Bills in 1982, would have
pocketed $40,000.
๏ฑ When the notes reached maturity with a fixed
10.45% coupon rate.
๏ฑ Of course, the days of double-digit
percent coupons may be long gone.
7. The ETF Option
๏จ Depending on your income level, Treasury
investments are typically more favorable tax-wise.
๏จ But gold investors may level the capital gains
tax playing field by investing in gold exchange-
traded-funds (ETFs), which are taxed exactly like
typical stock and bond securities.
๏จ Within the ETF framework, there are three
distinct ways in which investors may participate.
๏จ The first, gold mining ETFs, benchmark against
mining companies, appealing to investors who are
not interested in actual commodity ownership.
๏จ An example of such an ETF is the Market Vectors
Gold Miners ETF(GDX).
8. Bottom Line
๏จ Knowing when to bow out of gold can be a tough
call.
๏จ As a hedge against inflation (and geopolitical risk),
gold has ascended to great highs over the past
decade, due to liberal central bank policies, such
as the Federal Reserveโs recent quantitative
easing programs.
๏จ From here, gold could rally or fall further; no one
can predict which way it will go.
๏จ On the other hand, Treasuries
take speculation (as well as some excitement) out
mix.
๏จ Savvy investors should take a sober look at gold
versus Treasuries in their portfolios and construct
9. Ichimoku Kinko Hyo
Indicator
๏จ Ichimoku Kinko Hyo or the Ichimoku Cloud is a trading
indicator with elements to create a complete trading
strategy.
๏จ Several elements in this indicator help traders to
identify every aspect of the market.
๏จ The Kumo Cloud is the first element of this indicator
that helps to understand the market context. If the
price is trading below the Kumo Cloud, the overall
trend is bearish, and above the Kumo Cloud is bullish.
๏จ On the other hand, Tenkan Sen and Kijun Sen are two
important elements of this indicator that made with the
concept of moving average. These two lines move
with the price, and any rejection from these creates a
trading entry.
11. Average True Range(ATR
Indicator)
๏จ Average True Range indicates the volatility of a
currency pair. In the forex market, measuring the
volatility is very important as it is related to direct
market movement.
๏จ In every financial market, the increase of volatility
indicates the market reversal, and the decrease of
volatility indicates the market continuation.
๏จ The lower Average True Range indicates the
lower volatility and the higher ATR indicates the
higher volatility. Therefore, if the volatility is low,
you can extend your take profit. On the other
hand, in the lower volatility, you can find reversal
trade setups.
