The first phase of the bull market works in stealth. After a long bear market few are interested in the investment class. Wall Street said things like- "Gold is a relic from the past." This was when England stupidly sold their nation's Gold reserves driving down the price of Gold to $258. Liberal politicians sold the last wealth of the British Empire for pennies on the dollar. During Phase 1 only the so called "smart money" begins to buy Gold. In fact, we wrote many emails in 1999-2001 almost begging our clients to load the wagons with Gold. We said it's cheap and won't get much cheaper. We were right.
Phase 2 - Climbing a Wall of Worry
The second phase is usually a long-lasting phase with higher ups and downs. Gold prices can be volatile. Yet Gold exceeded all expectations by rising 13 years in a row. During Phase 2 the general public gradually finds this new market as prices go higher. In this case, the price of Gold doubled, tripled, and quadrupled before huge funds became believers in Gold. For example, along the way, the University of Texas invested $1 Billion in Gold. The creation of ETFs allowed wide institutional money like retirement funds to buy Gold like never before.
In the current Phase 2, CNBC posted the price of Gold and Silver every few minutes, as did their counterparts, bringing the rising price of precious metals center stage. The Wall Street Journal, Forbes, and online media began interviewing Gold experts. We began to see smart money step in as Austin Rare Coins had several hedge fund managers, billionaires, and many multi-millionaire's buying Gold from us- quietly and privately, off the radar screen.
As Phase two continued for a decade, everyone saw Gold prices rising, but in the back of their mind they still consider the asset class too risky. (How quickly these same folks have forgotten the Stock Crash of 2000 with 78% losses in NASDAQ and the near bank meltdown in 2008.)
Now, after a decade of out-performance, sentiment starts to change and the market participants start to feel good about Gold again. In time, a new optimistic attitude prevails as we enter the next phase of the bull market- the explosive blow phase.
Phase 3 - Euphoria
Year after year Gold averaged terrific annual gains, exceeding 450% from 2000 to 2013. The huge profits silenced the bears opposed to Gold. In fact, they looked stupid for criticizing Gold over the last 13 years. Still, the vast majority of investors still have no physical Gold. Some people who ignored Gold in phase 2 are slowly changing their minds. Bulls dominate the media and make up compelling arguments why Gold prices will rise forever. It won't.
It becomes conventional wisdom in the media that this investment class always goes up. The public starts to invest en masse, bidding up prices faster and faster, accelerating the returns and making it exhilarating for everyone. Whew! The last few investors on the side lines get pulled in during all this excitement. Prices explode into unreasonable levels.
Things Go Crazy Near the End of Bull Markets
Before you start thinking, "Wasn't that what happened as Gold topped $1,900, wasn't that a mania?" No way. What you should expect will be more like the end of the wild, 1979/1980 Gold mania Phase 3 that everyone has forgotten:
- Gold rose 34.1% in the last 10 days.
- Gold increased by 80% in the last 20 days.
- Gold almost doubled (95% gains) in the final 30 days of Phase 3
No, We Are Not in Phase 3
So far nothing like this happened. To us, this means that Phase 3 mania is coming, a time when we would all love to own Gold. But if you wait till it hits, it will be too late to buy. In our opinion the 2013 Gold correction was a temporary and very necessary correction for the bull market to continue long term. Not one single reason to buy and hold Gold has changed.
Why Bull Markets Eventually Crash
At the height of the Phase 3 excitement, a wicked problem starts to occur. There are not enough new investors left to continue to bid up the price, the market becomes overbought, and the whole thing starts to slow down. After years of superior returns, most people no longer remember the pain of the last bear market and they remain hopeful, even after the market starts to head down again. We see Phase 3 in progress today in U.S. Stocks. Too late to buy and time to sell.
These three phases of any bull market are certainly hard to see at times. Most people don't know history or appreciate these facts. They are told, "This time it's different." They often buy stocks or Gold or real estate way too late and get stuck. Those who expect to get filthy rich get greedy and refuse to sell after they've made a handsome profit.
What Should Investors Do Next?
Now this is a timely question indeed. We are of the opinion that Gold remains in Phase 2- we are years beyond the stealth Phase 1 as some institutions and a small portion of the public own Gold. Most of these are fiscal conservatives, they understand the coming debt crisis, they are often anti-government and anti-Obama. They worry the U.S. Dollar will be printed into oblivion. They hold Gold as insurance against the unexpected.
Look back at the chart above to the "WE ARE HERE" in green. That's where we feel the gold bull market is today- smack in middle of phase two, just after a correction. This is the calm before the storm. In our opinion, the price correction to today's $1,300 range is a great place to get started accumulating Gold or add to your core holdings. 
Our Recommendation
It's time to buy Gold ahead of a rising Phase 2 and the ultimate mania of Phase 3. This is where the most profits will be made in the years ahead.
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Because they can be acquired for a very small premium over their melt content, we expect an immediate sellout so click here to order online or call us at 1-800-928-6468 to secure your allotment today. As always, save an additional 2% with a check or bank wire. We expect an immediate sellout so order early to avoid disappointment.
P.S. Want more on why to buy Gold now? Click here to watch a video with our Sales Manager, Gabe Elton, on Wide Awake News discussing the 10 reasons Gold rockets up in 2014.
