Reply #5: Going for the gold [View All]

The markets have stumbled in 2005, paving the way for defensive strategies. While the streets may not be paved with gold, in the view of George Vasic, strategist & chief economist at UBS, the yellow metal offers better prospects, in a lower growth environment.

Relative to the S&P/TSX composite index, the gold sector's "best performance is when the market is up small, or down," Mr. Vasic told Report On Business Television. From 1970 to 2004, the gold stocks have gained an additional 6.3 per cent annually compared with the S&P/TSX, when the composite has made single digit gains

Mr. Vasic also noted the price of gold has been "tracing an almost perfectly negative correlation to the U.S. dollar,"

snip..

Whither the January effect?

Market watchers usually tout the first month of the year as the big one for inflows of investor cash in the runup to registered retirement savings plan and tax time.

But even Art Hogan concedes the January effect seems to be a washout so far this year.

"It's off significantly from historic levels," said Mr. Hogan, chief market strategist at Jefferies & Co. in Boston.


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