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Showing posts from January, 2010

So where are investments headed in 2010?

There are four investment issues on my mind as we start this New Year:

1. Commodities and specifically gold.

I believe that there are macroeconomic supply and demand issues which will continue to press commodities higher over the course of this year. Soft commodities, like coffee, tea, sugar, all increased over 25% in 2009. Metals in general had a very good year, and food as a whole should continue to rise. The one glamour play (pun intended) which confounds me is gold. I must admit that have successfully invested in gold this year via GLD, but now wonder if we are at the top. What would make gold go up? Not demand -- industrial and jewelry demand is sated. One reason would be a weak dollar (see below). General fear could drive gold higher. And then there is greed...as everyone sees the new highs and rushes in. What could make gold go down? No real demand, stable to appreciating dollar, no fear and fewer fools rushing in. Gold is sideways to down in 2010.

2. The U.S. Dollar.

The dollar ha…