An estimated 85% of financial success is being invested in the correct asset class, estimates Curtis Hesler, who is confident that the correct asset class for investors today is hard assets.
The editor of The Professional Timing Service uses several proprietary models to determine whether one should be in financial assets or real assets. One of these models is his Annual Asset Allocation Model.
He explains, "Its advice is simple as it will only point us in one of two directions -- financial (paper) assets or real (tangible) assets. The purpose of the model is to tell us which of these two assets offers the best potential reward for the lowest risk."
In recent months, the model has pointed toward real assets, suggesting that the risk of holding paper assets has been high. Hesler notes, "Although trading profits can be had in stocks, financial assets under these circumstances can turn very bad, very quickly -- as the recent market debacle illustrated."
One vehicle he likes is the exchange-traded fund, Market Vectors Gold Miners (ASE:GDX). The advisor also likes ASA (NYSE:ASA), pointing to the recent strength in the South African rand as an additional position. He notes, "ASA has been doing quite well; and if you can buy during March profit-taking, it would provide a nice diversification in your precious metal portfolio."
His favorite individual gold miner is Yamana (NYSE:AUY). Granted, he notes, Yamana is not a major producer, but, he says, "It is a sturdy, mid-level producer, and it's on a strong growth path."
How high can gold go? Hesler says, "I have no doubt that it will double from today's level. That is really a very conservative estimate. More important is how this drama will unfold. You should be prepared for a relatively bumpy, but profitable, ride through 2007.
"Once the March selling is over and gold recovers, I expect to see selling come in again at the May 2006 high. That will offer stiff resistance, and it will take a little time to overcome $730. You will hear a lot of foolishness about the end of the commodity bull and that gold as money is a bygone relic. Resolve now to stay the course.
"Once we wash out the weak hands at $730, gold will resume its rally. The real move will be during 2008 and 2009 when the truly awesome fireworks will begin. These will be the years when the commodity bubble will begin to surface."
For more stock picks from the leading financial newsletter advisors, visit Steven Halpern's free website, TheStockAdvisor.com.
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