GOLD- when to sell ?

Knowing when to sell is one of the most difficult decisions in investing. The difficulty gets compounded in the case of assets like gold. This is because unlike stocks, it is difficult to arrive at an approximate intrinsic value per ounce of gold. More often than not, relative valuations are relied upon. And even this may turn out to be long shots. Thus, the tendency to book profits after only a minor gain is at its maximum. And when the asset under consideration has been billed as the asset of the decade, the temptation to sell is at its peak. However, if you are invested in gold for quite some time now and are sitting with huge profits and wondering whether to head for the exit, it would pay to listen to a famous analyst who answers to the name of Dylan Grice.

Dylan is of the view that the reason he owns gold is because he is worried about the long-term solvency of the developed market Governments. Thus, eventually there is going to be a crisis of such a magnitude that politicians will be forced to accept that inflating one's way out of a recession is indeed not the right thing to do. And this is when the time will be right to sell gold. For the time being though, no such thought is even remotely entering the minds of economists and politicians. Thus, gold may continue to appreciate as western governments continue with their senseless policies.

Even Ajit Dayal shared a similar view at the recently held Equitymaster Investment Summit.

Ajit was of the view that the yellow metal is a perfect insurance against Government inanities and hence, a must in every portfolio.