Anyone Can Use The Dow-to-Gold Investment Strategy

ANDALUSIA, ALABAMA – Before we get into tonight’s Postcard, a word about my Emergency Investment Summit last night. If you know me, you know it wasn’t easy for me to get in front of the cameras again…

It’s a lifestyle I thought I’d left behind for good, after I quit my job and hit the road two years ago. But as I’ve written many times before, there are still serious cracks in the plumbing of the world’s financial system.

It was important for me to get out there… and to show other people how they can use our Dow-to-Gold strategy to protect their wealth over the next five to 10 years.

To everyone who tuned in, and even for those who couldn’t make it, thank you for all your support. As Kate put it at the Summit last night, we couldn’t have done it without you.

Now, I’m back on the road, writing to you today from a barn…

We’re in Southern Alabama, in the countryside. It’s so rural around here, our map took us down several dirt roads to get here. Here we are on one of them earlier…

And here’s my desk inside the barn…

We’d been sheltering at Kate’s parents’ house since March. But a couple of weeks ago, I bought a pop-up camper through Craigslist. It was untitled and unregistered. It’s 14 years old. And it’s had at least two previous owners. It sleeps three people. I paid $1,500 for it.

A few days later, we packed up, said goodbye to Kate’s parents, and off we went… to explore America and homeschool our kids with more real-life experiences.

Our ultimate plan is to drive to Alaska, but you have to drive through Canada to get to Alaska. And that’s not possible at the moment because the Canadian border with the USA is closed. We’re hoping it will be soon. If not, we’ll go somewhere else…

This barn (and the farm it’s on) belongs to a Postcards reader. He sent an email to my publisher offering to let us camp on his property. “Fantastic!” We said.

Here’s our camper in the barn…

Later today, we’re taking a shooting class. Our host has invited a former Army weapons trainer to show us how to handle a rifle.

– Tom Dyson

P.S. We’ll leave here tomorrow and head north. We’re meeting another reader – who also got in touch with us – and he’s going to show us around his town. “I’m glad you are going to see our part of Alabama. I have lived all over the world, including 27 years in Chicago as an airline pilot, and I can truly say there is nowhere else I would rather be.”

P.P.S. Gold continues to rise. It hit seven-year highs this week. Kate and I are still “all in,” and we will be until the Dow-to-Gold ratio gives us our “sell” signal. I went into the details at my Emergency Investment Summit last night. Kate even joined in over the phone. If you missed it, watch the replay right here.

Like what you’re reading? Send your thoughts to [email protected].

Readers inquire about a bond-to-gold ratio… counterfeit gold… and owning silver in addition to gold…

Reader comment: I always enjoy your letters. Hope they can keep on coming. Just a question: You highlight the Dow-to-Gold ratio as the most important trend in finance. I am curious as to your thoughts on the value of a similar bond-to-gold ratio.

Tom’s response: I watch the bond-to-gold ratio, too. (I use the 10-year Treasury bond.) This is an important ratio because it shows the preference of savers to save in hard money versus paper claims. The problem with it is the Federal Reserve can control the price of the 10-year Treasury bond by using its printing press to buy Treasury bonds in infinite quantities. So the chart ends up only reflecting gold’s movements.

The Dow-to-Gold ratio shows the preference of the world’s capital to either look for risk (investments) or reject risk (gold). I think this is a more important indicator as it shows fear versus greed, expansion versus contraction, growth versus safety. In other words, it’s the ultimate measure of investor sentiment. And investor sentiment is predictable when looked at over many years, which means we can use it to improve our investment strategies by being contrarians.

Reader question: Do you have any concerns about counterfeit gold? It seems like it would be really lucrative for an unscrupulous organisation to buy real coins and sell fake ones. Does anyone do periodic testing?

Tom’s response: I make sure I buy my gold from trustworthy businesses, not, for example, from eBay.

Reader comment: First, I’m sorry that I missed meeting you, Kate, and the kids when you were staying at Bill’s house in Nicaragua. In 1997, my late husband and I bought a new Titan 24’ motorhome. Our four children – at that time ages 13, 10, 8 and, 5 – my parents, and I took off across the U.S. As I have read your Postcards all along, I am reminded of the unusual experiences of my summer trip with my family. Now, many years later, how those memories are still relevant and that you are enjoying your adventure in a similar manner. Thank you for sharing.

Reader comment: I’m a great believer in the Dow-to-Gold ratio, too, but what about silver? What about instead of 100% in one single strategy, why not 50% to 50%, or 80% to 20%, or 90% to 10% ? Even just 10% in silver… Think about it. It’s real money, too. Just like gold, only better for the “common man.” Silver, “the poor man’s gold,” recently reached a silver-to-gold ratio of 120+. Never before in recorded history has this happened.

Tom’s response: Silver represents about 20% of my portfolio.

And, as always, thank you for your messages! Please keep writing us at [email protected].