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    What Our 47 Percent-A-Year Gold System Says Now

    You could have turned $10,000 into more than $3 million by trading gold, if you had invested following the principles of our True Wealth Systems gold strategy.

    The system is incredibly simple, actually, but it has delivered 47 percent compound annual gains when “in the trade.”

    Today, I will share with you the basics of how our incredible gold system works, and what it is saying about gold today.

    Our True Wealth Systems gold system simply attempts to identify bull markets in gold.

    So let me ask you: How do you know when it’s a bull market in gold? In True Wealth Systems, we have two systems for this.

    The first system is this: It’s a bull market in gold when the gold price is going up against the world’s most important currencies.

    We took a look at the four most widely traded currencies: the U.S. dollar, the euro, the British pound and the Japanese yen. And we tested various systems based on a simple concept.

    If gold is up versus all four currencies over the previous month, buy gold. Repeat the next month. (To smooth out the daily fluctuations in gold, we use the average gold price in each currency each month for our signal.) Historically, when gold is up versus the major currencies in the previous month, a double-long gold index rises at a compound annual rate of 39 percent.

    The results of this one particular strategy over the past more than 40 years have been incredible.

    If you simply bought a double-long gold fund when you got a signal and then switched to Treasury bills when the signal was off, you would have turned a $10,000 investment in 1971 into more than $3 million today.

    Since 1971, the price of gold has risen at a compound annual rate of 9.5 percent a year. By using this much-less-volatile system, your wealth would have compounded at 15.1 percent a year.

    This system is simple, but it’s sound. History shows that a great predictor of when gold will go up is when it’s already going up versus the major currencies.

    Going up versus all four currencies is a tough standard for gold to beat every month. So you’re only “in the system” about one-third of the time.

    Our second system is “in the trade” much more frequently than our first. It is our “trend” system.

    The trend system is simple: You own gold when its long-term trend is up. Going back 40 years, when gold is in an uptrend, a double-long gold index rises at a compound annual rate of 29.5 percent.

    By itself, each system is good. But you really want to be invested when both systems are firing. That’s when you make the biggest gains.

    A double-long gold index has increased in value at a compound rate of 47 percent a year when both of our gold systems are in buy mode. Both indicators are in buy mode only about a quarter of the time.

    And right now, neither system is in buy mode.

    Neither system has been in buy mode since October, and that has been the right call in gold. The precious metal has fallen about 10 percent since then.

    Our True Wealth Systems gold strategy really delivers. It’s simple and intuitive, and it can make you a lot of money. In short, you want to be in gold when it says buy. And it’s not saying to buy yet.

    Based on our powerful True Wealth Systems gold strategy, there’s no hurry to pile into gold.

    Good investing,
    Steve Sjuggerud

    This article was originally published on Feb. 21 at DailyWealth.com.

    Dr. Steve Sjuggerud is the founder and editor of one of the largest financial newsletters in the world, True Wealth. Since inception in 2001, True Wealth readers have made money every year with safe, contrarian investment ideas. Steve did his Ph.D. dissertation on international currencies, he's traveled to dozens of countries looking at investment ideas, and he's run mutual funds, hedge funds, and investment research departments. Steve's investment philosophy is simple: "You buy something of extraordinary value at a time when nobody else wants it. And you sell it at a time when people are willing to pay any price to get it." It's harder than it sounds, but Steve continues to be able to do just that for his readers. Click here to learn more.

    | All posts from Dr. Steve Sjuggerud

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