Portfolios (Gold and Silver) Stocks and ETFs

[Duarte]

Before I talk about my portfolios, I will talk about my goals.

My first goal is to try to respond as best as possible to what the market is doing and act appropriately. I am talking about trend-following discipline.
I determine my market posture through a careful analysis of the charts. I observe the market direction - up, down or sideways – with the Gold & Silver index – Philadelphia (XAU), Gold index, Silver index or other leader index where the stock acts. Acting in concert with the market direction, I increase my odds of success.

I pick stocks to buy based on a careful analysis of the historical charts. I also consider other factors, such as net cash from operating activities, volume and beta.

When I expect the market will go up, my market posture is bullish. That means, I’m buying stocks and Exchange Traded Funds (ETFs). My market posture remains bullish until my "stop" is reached.

When i expect the market will go down, my market posture is bearish. That means, I’m buying inverse Exchange Traded Funds (ETFs). My market posture remains bearish until my "stop" is reached.

When I don't expect anything, my market posture is neutral. That means, I’m not buying.

My second goal is to explain in simple terms the reasons for my decisions.

 

[Duarte]

I´m going to have 7 independent portfolios, of which the first 6 are long/short trend-following with ETFs of different leverage, and the 7 is a long trend-following with Gold and Silver stocks.
I have separate emergency stop for each ETF/stock, which is influenced by portfolio volatility/leverage and my perception of trend strength and risk.
The ETFs of different leverage allow investors to position themselves, according to their risk profile and return.

Two additional tips to review before investing in a leveraged ETF
1. Decide first on the amount of leverage that is appropriate from 1x to 3x.
2. Before placing a trade, confirm the ticker. As this products have similar ticker between long and short version, double checking will prevent errors.

 

[Duarte]

Emergency stop
The emergency stop that I use is activated if the price moves downwards too far.
Because of the high volatility of the stocks and 300% leveraged ETFs, the stop is placed farther away from the current price, implies that the portfolios that use these assets have higher risk.
When my uncertainty is higher or plan to sell, the stop is closer to the current price.

 

[Duarte]

I consider 5 USD per buy and sell order.

Broker example http://www.interactivebrokers.com

The monetary value of each position is 4000 USD.

I may have open positions in some of the assets referenced here in my real account.

 

[Duarte]

Portfolio 1: Gold ETF Portfolio (1x) (100% of the benchmark's daily performance)
... uses SPDR Gold Shares (GLD) or PowerShares DB Gold Short ETN (DGZ)

Portfolio 2: Gold ETF Double Leveraged Portfolio (2x) (200% of the benchmark's daily performance)
... uses PowerShares DB Gold Double Long ETN (DGP) or PowerShares DB Gold Double Short ETN (DZZ)

Portfolio 3: Gold ETF Triple Leveraged Portfolio (3x) (300% of the benchmark's daily performance)
... uses Direxion Daily Gold Miners Bull 3X Shrs (NUGT) or Direxion Daily Gold Miners Bear 3X Shrs (DUST)

Portfolio 4: Silver ETF Portfolio (1x) (100% of the benchmark's daily performance)
... uses iShares Silver Trust (SLV) to go long or short*
*I prefer Inverse ETFs but so far, I haven´t found any silver inverse ETF (1x)

Portfolio 5: Silver ETF Double Leveraged Portfolio (2x) (200% of the benchmark's daily performance)
... uses ProShares Ultra Silver (AGQ) or ProShares UltraShort Silver (ZSL)

Portfolio 6: Silver ETF Triple Leveraged Portfolio (3x) (300% of the benchmark's daily performance)
... uses VelocityShares 3x Long Silver ETN (USLV) or VelocityShares 3x Inverse Silver ETN (DSLV)

Portfolio 7: Gold Silver Stock Portfolio
... is composed by 5 Gold Silver Stocks

 

[Duarte]

As I have described, I observe the market direction in the indexes/ETFs, determine my market posture and I act in concert with the market direction.

 

[Duarte]

Rule:

All entries and emergency stops must be sent to this "thread " , with a minimum of 5 minutes before the next market opening and automatically placed on the market after the market opens.

 

[Duarte]

Rule:

All entries and emergency stops must be sent to this "thread " , with a minimum of 5 minutes before the next market opening and automatically placed on the market after the market opens.

This means, that all trades can be done in real account.
As all entries will be the opening price, it is possible to buy at a lower price, on many occasions, than I can get in the portfolios.
The emergency stop, I'll inform before too.

All entries and exists, I'll inform before they happen in the portfolios.

 

[Duarte]

The PHLX Gold/Silver Index (XAU) is up since the end of July.
After rising considerably, a fall can happen in the short term.
Because of this, I'm waiting for something that makes me decide to buy.
I would prefer, since I'm out, a decline in the market, but Mr. Market says: "Prefer whatever you like. I don't care."

 

[Duarte]

Why I decided to have multiple portfolios and not one or two?

(this response also explains the other portfolios).


Basically, it's because I prefer not to mix different leveraged ETFs.

If I chose, I´d buy only 2x or 3x leveraged ETFs, but I decided to have different types of leverage separately because my risk profile is not equal to all investors.

I understand that can be a little confusing, many portfolios, but despite giving me more work, I think it is more complete and then later, it will be possible to do readings that I find interesting. I can compare the difference of return between the various types of leverage, and also between ETFs and stocks, these are also some of my goals.

 

[Duarte]

I was expecting a decline, but maybe it will not happen yet.

So…

I will buy:

SPDR Gold Shares (GLD)
PowerShares DB Gold Double Long ETN (DGP)
Direxion Daily Gold Miners Bull 3X Shrs (NUGT)
iShares Silver Trust (SLV)
ProShares Ultra Silver (AGQ)
VelocityShares 3x Long Silver ETN (USLV)


GREAT PANTHER SILVER LTD (GPL)
NEVSUN RESOURCES LTD (NSU)
FORTUNA SILVER MINES INC (FSM)

I picked 3 stocks, which are in concert with the market direction.
All of the stocks mentioned above increased their net cash provided by operating activities from 2010 to 2011.

 

[Duarte]

In this thread, I'll pick stocks that have a high risk.
The leveraged ETFs also have a high risk.

 

[Duarte]

I still feel that the PHLX Gold/Silver Index (XAU), after rising considerably, may have a correction soon, but as long as the trend remains up it is possible to go higher.
I will expect that Gold/Silver market continues to go up, as long as the XAU continues to close above the previous low 185,85 and key support. If close daily below 185,85 I consider the possibility of exit.

 

[Duarte]

Below is the GOLD SILVER STOCK PORTFOLIO.

It has not started well...

 

[dante3]

Below is the GOLD SILVER STOCK PORTFOLIO.

It has not started well...

it really hasn't but i hope it will be ok

 

[Duarte]

Below there are the Portfolios.

 

[Duarte]

The following charts provide an overview of the portfolios evolution since the beginning.

The black line illustrates the evolution of the portfolio and the blue line shows an exponential moving average.
(Updated on Fridays)

 

[Duarte]

I have wanted to try trade without any stop loss because I take a long time to put the stop loss in all assets but the market fell and I took time to act.
In rare situations I'll consider the possibility to buy and sell partial positions and I will not use the amount that I have determined at the start. (4000 USD)
This would have been one of these situations.
I'll spend more money on commissions, but I'll protect the portfolio.

I wrote before about how these stocks and leveraged ETFs have a high risk, in particular the NUGT and the DUST are extremely volatile. There are two alternatives, DGLD and UGLD, which tend to be less volatile but do have low volume.

 

[Duarte]

The GLD (Gold) has run into resistance and has begun to fall, the SLV (Silver) shows the possibility of a double top.
I should've trusted in my feeling.

Now, I'm going to wait the confirmation that the rising support trend line in XAU is broken.

 

[Duarte]

The rising support trend line on the XAU daily chart has been broken, but I also see a possible descending wedge.
After a downward breakout, price sometimes stops below the wedge and soars upward.
The confirmation happens after an upward breakout of the descending resistance line.