Market Expert: Invest in Gold

" I think might disagree with you on -- in this Comex gold hitting an intraday record high of 109620. This morning. And my next guest says gold for mining companies mutual funds. It's a good investment think about that a good investment and getting up 45% year to date Sam Stovall of Standard and Poor's chief investment strategist good to see Sam. Good to see you elect us so gold still a good investment tell -- why."

" Well I think it is I think actually that both fear and greed are pushing prices a little bit higher. From the -- standpoint you have a lot of investors were worried about inflation. Being a concern because of all the liquidity. And stimulus being pumped into the economies globally. Also concerned that we might end up with a double dip recession and as a result more problems in the credit markets from the greed standpoint. Momentum is there I think a lot of investors are trying to with people I need to be rotating out of particular areas of gold is up 45%. That compares less favorably would. The 55%. Gain for the S&P 500. And the 66%. Gain from mid and small cap stocks also people are worried about treasuries possibly being in a bubble environment. And what do I do when the dollar is falling you move into gold so. I think in general right now gold tends to be the asset class of choice."

" And looking out a year twelve month price target where do you think gold could go and if there is a bubble created in gold copper is up 50% year to date as well. What do you put your money to work if if if there could be a -- could get closer to those price target."

" Well the price targets were generated from a technical scenario. Very hard to come up with price targets based purely on fundamentals. But our chief technician mark Carter -- 1213. Hundred is a good number that could be reached within the coming twelve month period. There are three ways to play you can go for commodity based. ATF such as I -- UN GLD. You can go for the actual equities themselves which offer more of a leveraged play. Companies such as American Barrick or Freeport-McMoRan. Copper and gold companies that are both right by by S&P analyst. And then lastly using S and p.'s new mutual fund ranking system which looked forward. By assessing the underlying holdings we have strongest buy recommendations on the Franklin. Gold and precious metals mutual fund as well as the USAA precious metal and mining."

" Fund our camera switch gears for a moment a lot of talk about the volatility in the markets over the past couple weeks a lot of people in the market you know focus on. Implied volatility S&P voluntarily to suggest whether or not we're topping out in the market here. What are we seeing here is this the normal cycle are we beginning what could be a bear market."

" I think that we're simply going through a normal digestion of gains we have. Decline a little more than 5% from the 1098 top that we saw back on October 19. And I think we could easily move down to about the 1020 level or even slightly lower than that. On the S&P 500. But because our core belief has not changed we still think that the economy. Isn't a slow uptrend we will not see a double did a double dip in the economy because earnings are likely to be recovering in 2010. And as a result you know historically what you find is that the market. Tends to continue to advance during the first two years of a new bull market which in which each of the ten sectors in the S&P 500. Host an average increase you really start to worry about the health of -- bull market of the third year not typically in the first year or even the second."

" Let's look ahead to Friday and employment data nonfarm payrolls number we saw the eighty PB challenger gray and Christmas numbers. Some signs of hope their but it still appears so small to medium sized businesses are still laying off people. What do we need to -- change in the job data suggest that we can recover without perhaps a jobless recovery."

" Well I think what if to recover without a jobless recovery then obviously we need to see the unemployment rate -- and start to come down. I don't think that's going to happen our expectation is that the unemployment rate will probably peak at about. Ten point 4% maybe in the latter part of the first quarter of 2010. But let me remind you that historically the market tends to anticipate. Peaks in unemployment by an average of nine months. Also back in 1990 the market bottom 21 months before unemployment -- And also back in 1982. We had the unemployment rate remained above 10% a good year. After the market had bottomed so -- I think that while it's going to cause some bears to remain bearish because unemployment continues to rise I think longer term. The market will look through that and continue to work its way higher on I came Stovall standpoint chief investment strategist breaking against."