Barrick Gold Has a Bright Future

I don’t believe in the health of the stock market at large. It has further to fall in my opinion.

Nationally it seems we are being fed the idea that the worst is behind us in terms of this financial crisis, and that reassuring message seems to have gotten people back into the stock market. It’s a classic suckers rally that is only going to end badly for investors. Paradoxically, the modern investment mantra of "stocks for the long haul" and using diversity as a means of protection is just going to guarantee that the average investor will feel the full weight of this next leg downward.

Gold, on the other hand, has a bright future. I’ve made a great deal of money trading shares of Barrick Gold (ABX) over the past twelve months. It’s a company I follow quite closely. I feel it’s one of the few great investments available in the stock market as it allows for you to gain leveraged exposure to the rising gold price while at the same time holding a stock that is paying you dividends.

While the oblivious investors of the world are foolishly plowing their money into stock market index funds without the slightest clue as to the fundamentals of their underlying investment, I believe, as Henry Ford did (and Warren Buffett does) that it’s perfectly alright to put all your eggs in one basket provided that you “watch that basket.” Barrick is my egg basket and I watch it quite closely.

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