Worth Their Weight in Gold

Everyone’s heard about oil going over $100 a barrel recently. Getting less publicity is the dramatic bull market in precious metals. Year to date, gold is up almost 17 percent and silver is up almost 37 percent.

Too late to catch the upswing in prices? Not necessarily. Global demand for precious metals will likely keep rising as the exploding middle class in Asia gets a taste for the finer things in life. So, yes, prices have moved up considerably over the last few months. But there is no reason to believe this is a bubble that could burst anytime soon.

You can get involved in this market by investing in ETFs (Exchange Traded Funds) that focus on precious metals. Choose from broad-coverage ETFs, such as the Powershares CD Precious Metals Fund (DBP), to more narrowly focused ETFs, like the iShares Silver Trust (SLV). You can even invest in silver and gold mining companies with the Market Vectors Gold Miners (GDX) fund. Purchasing shares in ETFs is as simple as buying shares of a stock. The benefit is you get the diversity of a mutual fund.

Commodities should always be a part of diversifying your portfolio, and it’s easy to add them with ETFs. Take advantage of the precious metals bull market and pick up a few. Don’t get spooked by any short-term price drops. We are in the midst of this long-term bull market, so consider them to be longer-term investments. A moderate pullback in prices may just make it cheaper for you to buy in.

[Ed. Note: Rick Pendergraft is a professional trader and market analyst. In Rick’s new investment service, he reveals how you can make hundreds – even thousands – of dollars just by playing a simple game of “guess the pattern.” Learn more here.]

Inspired by his high school economics teacher, Rick Pendergraft fell in love with the markets at an early age. He entered his first investing competition at 17, and opened his first brokerage account before he finished college. At the age of 23, on the third options trade he had ever placed, Rick turned $1,800 into $22,000 in less than a week, when the company he bought became the target of a takeover. He admits it was a stroke of luck, but it was a memorable education as to the leverage that options can provide. After a ten year career in banking, Rick decided to pursue trading full-time. To get his foot in the door, he started out in the sales department at Schaeffer's Investment Research. It was not long before his talent was recognized and he was invited to apprentice under Bernie Schaeffer, one of the top options traders in the world. Rick thrived in his new position and twice received the award for "Top Trader."Rick has developed a loyal following of readers who are grateful for his timely warnings and profitable advice. He is widely recognized as a market expert and has been frequently quoted by Reuters, BusinessWeek, Forbes, USA Today, the New York Times, and the Washington Post. Rick's primary focus is on identifying short and intermediate term rising and falling trends in the major market sectors. His analysis is based on technical factors along with indicators of market sentimentRick lives near Delray Beach, FL with his wife and three children.