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Worth a Look: 16 January 2018 Edition

Worth a Look: 16 January 2018 Edition

Well I’m about sick and tired of the snow here in the midwest of the United States but the only melting I’m seeing today is in cryptocurrencies. I saw Bitcoin trading down to around $10,000 and nearly all the top cryptocurrencies by market cap were down around 30% at the lows of the day.

Articles:

Democratic Candidate For Illinois Attorney General Mugged At Gunpoint – Oh, the Irony – from ZeroHedge

The Most Reliable Cars in the US – from LewRockwell.com

44 Fantastic Uses of Paracord – by Gaye Levy

Doug Casey on the Coming Financial Crisis

China Downgrades US Credit Rating – from ZeroHedge

Media Darling Bitcoin Volatile, Unloved Asset gets a Hopeful Boost

Media Darling Bitcoin Volatile, Unloved Asset gets a Hopeful Boost

A 2.6% rise in the price of gold doesn’t seem like a lot given the tremendous volatility of cryptocurrencies like Bitcoin which can go up or down 30% in a day. Twenty eighteen has started off strong for the yellow metal. While gold has lost some if it’s shine in the eyes of many since the drop from it’s highs in 2011 it remains the standard in wealth preservation as far as I’m concerned. I am as bullish on gold today as I ever have been. Perhaps not in the medium term, but in the short and long term I think gold will be rising in USD price.

I posited back in April 2017 that 2016 was the start of a new bull market in gold and that trend has continued.

The dashed purple line indicates my prediction/guess as to the price movement of gold. This prediction was made back in the middle of April, 2017 (indicated by the vertical red line).

While this prediction looked fairly close up through August 2017, gold has since diverged quite a bit. Because gold hasn’t been able to take out the previous high of $1377.5 made back in July 2016, this bull market is looking fairly weak from a technical perspective, especially compared to the 2008-2011 bull market. This is why I think gold looks weak in the medium term (say 6 months to a year). In the short term gold is looking good, as previously mentioned gold is up over 2.5% this year.

But even if the technicals of gold look weak the fundamentals of gold are still extremely strong. I think there is little chance that we will see gold available at a price of 1045 USD ever again and I think gold will eventually make new highs in excess of $2,000. I do think gold is in a bull market, albeit a weak one. A US War with North Korea, a Trump impeachment, another large scale terrorist attack, or any number of other catalysts could easily send gold upwards.

While we might have to wait until 2019, it will be interesting to see if gold breaks through the resistance (solid red line) and if so if it makes a new high above 1377.5, or if it goes back to test the longer term support levels drawn in a dashed blue line. Of course it could even do both if we see a lot of volatility.

I feel confident that gold will be above $1300. Regardless I think holding between 10%-25% of one’s assets in physical precious metals is a wise move. Go closer to 10% if you have faith in the US.gov and legacy financial system and closer towards 25% if you are a little more bearish on the US governments ability to handle the national debt, pension, social security and medicare funding crises. Of course all of these precious metal allocation percentages are just opinions and don’t take into account your age, goals and risk tolerance. If I had a lot of money in cashflow positive real estate or a successful and recession resistant business then I probably wouldn’t put as much into gold.

But if my income came from stocks and my job I would want to have 10-25% of my assets in precious metals and I would want to have some money in foreign stocks. I don’t think betting on the dollar is wise, it hasn’t been since 1913 and I think the dollar will only continue to weaken and at an accelerated pace.

While there is no substitute for physical precious metals like gold and silver held in a secure location one controls I think Goldmoney is a fast, easy and secure way to own physical precious metals. When you sign up for a Goldmoney holding account be sure to use my referral code: howigrowmywealth. A Goldmoney holding account allows you to store physical gold throughout the world in secure jurisdictions like Singapore and Switzerland. I personally own over $1,000 worth of gold through Goldmoney.

John’s Goals for Twenty-Eighteen

John’s Goals for Twenty-Eighteen

I find that the turning of the calendar is as good a time as any to set new goals for the coming year. I’m very much looking forward to seeing what 2018 has in store! So what are some of my goals for two thousand eighteen?

More Visitors!

First I’d like to get 800 users to this website each month. I think I offer exceptional value on this website and I want more people to read what I have to say. In 2017 I averaged 630 users over the course of the twelvemonth and I think 800 is an achievable goal. I have you to thank for meeting my 2017 goal so thank you!

Closer Tracking of Discretionary Spending

Controlling expenses won’t make you rich, but it will prevent you from going bankrupt. It doesn’t matter how much money you make if you spend more than you make. There are countless examples of this happening. I live a fairly frugal lifestyle but I’d like to keep a closer watch on my discretionary expenses to make sure I’m not spending my hard earned money on too many frivolities.

Save $X this year

I’m not prepared to share how much my savings goals are, but I do have a specific amount of money I want to save this year. I’m going to accomplish this via direct deposit.

All the employers I’ve worked for allow me to direct deposit my paycheck into multiple accounts. So I simply set the amount required to meet my goal to go to the account where I store my savings and then forget about it. It’s important to be realistic so that you have enough money to meet your expenses but I find direct deposit is an easy and effective way for me to save money.

Earn $250 in passive income via Mixcoins

I have about .15 BTC over at Mixcoins.com (previously BitBays). It’s in their arbitrage fund earning an annual percentage rage of 10.96% or about 0.000043 BTC ($.68/day with BTC at $16,000).

So that should net me around $250 by the end of the year if the price of Bitcoin stays around $16,000. Not a huge sum of money but not bad for passive income. Most of the money I have in cryptocurrencies is in various other altcoins. Bitcoin is just one cryptocurrency in my “Group of Six” which I shared with my newsletters subscribers.

If you do decide to sign up for the mixcoins arbitrage fund be sure to use my affiliate link: https://mixcoins.com/?r=171207.

Twenty-Eighteen

Those are some of my goals for 2018. I share them because they might inspire you to form goals of your own. I think it’s important to write your goals down or type them up and print them off. Carry your goals with you and have an accountability partner that you check in which to share your progress. Make sure your goals are SMART and think about a WHY. Why are these goals important to you and why will you sacrifice and work to make them happen.

Since this website is about alternative investments and growing and protecting wealth I’ve shared some of my financial goals. But I also have goals for other areas of my life. After all, money is a useful (and necessary) tool but there is a lot more to life.

2017 Year in Review

2017 Year in Review

A year ago I communicated some of my goals for 2017. Today I’d like to review how I did with my goals from last year. In the coming days I’ll share some of my new goals for 2018.

Make $.75 per day in Bitcoin-related Passive Income

My plan for this approach involved BitBays and Bitfinex. Bitfinex has been closed to US based customers and BitBays shut down (now called MixCoins) when China decided it didn’t like cryptocurrency exchanges. In light of these disruptions I was not able to make $.75 per day in Bitcoin-related passive income. However, I did make more than that on capital appreciation of cryptocurrencies.

Grow my Trading Account by 8%

This was the least successful of all my goals. I was not able to grow my trading account using the covered call strategy. A number of my value stocks don’t have options, so I wasn’t able to sell covered calls on them. And some of the covered calls I sold were too close to where the stock was trading and the covered call was exercised.

Stick to my Budget

I was rather frugal in 2017 and for the most part stuck to my budget. I would like to watch it more closely in 2018. My strategy is mainly to pay myself first (retirement, savings, investment contributions) and then as long as I’m able to pay for my rent and other expenses without going into debt I’m doing fine. I would like to keep a closer watch in 2018.

Make $1,000 Selling Coins

In previous years there have been some very much in-demand coins that I was able to sell for a goodly profit, however, none of these opportunities presented themselves in 2017 so I did not make any money (or lose any money) selling coins.

Grow HowIGrowMyWealth.com Audience to 500 Users per Month

I had an average of 630 users (as defined by google analytics) per month in 2017. My best month was December, with 816 users. Thank you! So I was able to exceed this goal by 26%!

Yearly totals include:
9,139 Sessions
7,101 Users
13,535 Pageviews

2017: A Mixed Year

All in all it was mixed. I exceeded my goals for increasing the audience of this website (again thank you!), however, some of my other goals fell short.

Some of those reasons were outside of my control (exchanges booting US based customers, the mint not creating rare in demand coins). However there are several things I could have done better.

More accountability and tracking

Talking about one’s goals with someone else is critical. I also think it is important to print off your goals, carry your goals with you and check on them on a regular basis. I hope to do ever better in 2018 and look forward to sharing some of my new goals in the coming days.

Happy New Year!

Gold Reclaims $1,300

Gold Reclaims $1,300

Cryptocurrencies are all the rage and gold remains time tested. Over the last few years cryptocurrencies like Bitcoin have been extremely volatile (mainly to the upside) while gold has been fairly stable and moved mostly sideways. Growing and protecting my wealth through alternative investments has been my focus for the last four years so I watch both the precious metals and cryptocurrency markets with great interest.Bitcoin

Bitcoin has risen exponentially in 2017. Clearly buying Bitcoin at $900 and riding it up to $20,000 was a fantastic trade in which the initial capital would have appreciated over 2,000% in less than a year.

How anyone besides a time traveller would have known to do that other than faith or luck is beyond me. I still think there are problems with cryptocurrencies. Even though there are several aspects of cryptocurrencies that I do like and a number of tokens and coins I choose to own.

Gold on the other hand has been slow and boring. As I wrote about in April this year, 2016 looks like it was the start of a new bull market in gold. Prior to 2016 gold had steadily declined since it’s $1,900 highs in 2010.

Gold price

Since 2016 gold has steadily risen in price

A Place for Gold

I believe that now as much as any time in history gold (and silver) remains an important part of a diversified portfolio.

Dorian Nakamoto

Dorian Nakamoto was accused by Newsweek of being Bitcoin founder Satoshi Nakamoto

I don’t know how high Bitcoin will go. However, in 50 years I believe that Bitcoin will be worth less than a few dollars and gold will have at a minimum retained it’s value in terms of purchasing power if not appreciated beyond that.

I think it’s entirely possible that some other cryptocurrency will be commonly used as a medium of exchange fifty years from now but it won’t be Bitcoin.

I could be wrong about that so I do own some Bitcoin but I’m not willing to take out a mortgage in order to buy Bitcoin on margin, as some people are doing.

Charlie Lee

Litecoin founder Charlie Lee announced 20 December 2017 he sold all his Litecoin

Source: https://www.engadget.com/2017/12/12/bitcoin-mania-mortage-house-investors/

If you want to speculate and trade I think Bitcoin and other cryptos are great for that.

I buy Bitcoin on Coinbase and move it to other exchanges to diversify into my “Group of Six” and it has worked out well so far.

If you have some money you can afford to lose then trade and speculate away.

However, I think that gold remains the gold standard in wealth preservation.

Vitalik Buterin

23 year old Ethereum Founder Vitalik Buterin

I don’t think there is any substitute for buying physical gold and silver from a reputable dealer.

Physical bullion you have in your possession is the ultimate way of removing yourself from an out of control wall-street/banking system. I don’t want to go down the path of radical Cartesian skepticism but with precious metals you aren’t betting on the Janet Yellens and Jamie Dimons of the world having everything under control and are looking out for the little guy.

With gold you don’t have to worry about Satoshi Nakamoto, Charlie Lee or Vitalik Buterin making a bad decision and tanking cryptocurrencies.

 

Geopolitical Risks Remain

The risks haven’t gone anywhere. The stock market continues to climb but this is one of the longest periods in the history of the stock market without a correction. Meanwhile the fundamentals are not strong.

Debt at the governmental, municipal and personal level continue to grow with no end in sight.

Central banks throughout the world have printed trillions in fiat currency. One of the most important alternative investments to hedge against these risks are precious metals. Blockchain technology, while revolutionary and disruptive to the status quo do not replace gold and silver as the ultimate insurance policy against central bank insanity.