Rebalancing CEF (while it's discounted)

[Cyclesguy]

Anyone else getting primed and ready to buy more CEF? Another 10% punch to the metals and I'll be looking to get some more.

It's interesting that the fund is trading -7% to it's NAV , I'm in the accumulation stage and spent most of this year buying at a major discount , I'd estimate I averaged in at about -5%.

Part of me wonders if I should be more patient, and view CEF's current value as the "NAV" instead of market price for the sake of rebalancing, leading to an even lower rebalancing target before I buy more?

[Libertarian666]

Anyone else getting primed and ready to buy more CEF? Another 10% punch to the metals and I'll be looking to get some more.

It's interesting that the fund is trading -7% to it's NAV , I'm in the accumulation stage and spent most of this year buying at a major discount , I'd estimate I averaged in at about -5%.

Part of me wonders if I should be more patient, and view CEF's current value as the "NAV" instead of market price for the sake of rebalancing, leading to an even lower rebalancing target before I buy more?

I'm planning to buy more CEF and/or GTU when I have some new cash. The discounts make that even more attractive.

[Ad Orientem]

Cyclesguy
Are you using CEF for the gold part of a Permanent Portfolio? If so, you might want to take a look at GTU. Same parent company but it's a pure gold fund. As I'm sure you know CEF is near half silver. Silver is different from gold in that it has a lot more industrial usages and it is quite a bit more volatile.

That said if I were convinced of impending disaster as most Austrians and gold bugs are (and have been since roughly 1933) I'd be hugely attracted to CEF as a speculative VP play.

[stuper1]

I've been watching the continuing discount on GTU for many months, since I own a good chunk of GTU.

I assume the discount will decrease when gold prices start increasing.  Here's a question I have.  Will the discount decrease be a leading indicator or a lagging indicator of the bottom on gold prices?

[Cyclesguy]

I assume the discount will decrease when gold prices start increasing.  Here's a question I have.  Will the discount decrease be a leading indicator or a lagging indicator of the bottom on gold prices?

In my experience the NAV tends to bottom somewhere between -7 and -10 % NAV. That is THE indicator of a major bottom IMHO, I can't see it lasting too many more months but who knows, it's a wild year for gold. The only wild card is whether or not we crash to 1000$ gold , I anticipate that would be a quick spike bottom, and maybe CEF dives to -10% below NAV in such a scenario.

Cyclesguy
Are you using CEF for the gold part of a Permanent Portfolio?

My PP is modified, call me crazy and I'm not a PP purist- I carry an allocation to miners (12.5%) and bullion (12.5%) at all times. My bullion is about 65% silver and 35% gold, I own another silver closed end fund along with the CEF. In fact I'm 65% silver and 35% gold. I'm young enough though to withstand a couple of bull/bear cycles. Reality is silver outperformed gold by fourfold/fivefold in the 2008-2011 run up and historically has outperformed during other bull runs, I like the odds of it doing it again from here. Miners are the cheapest they've been ever relative to bullion, and I like the odds of a massive leveraged gain over bullion when things turn around.