Previous four years were very generous for precious metals. President Barack Obama's first term saw silver up an eye-popping 236% while gold added an impressive 128% gain. Those both precious metals overwhelmed the S&P 500's 75% return. Such huge results raised concerns in more than a few investors about another asset bubble in a long list of bubbles that includes technology, finance and housing in the past 12 years.
"Investors should prepare for rising prices and more expansionary monetary policy now that President Barack Obama has won reelection. "If Obama wins, it's going to be more inflation , more money printing, more debt, more spending," Rogers recently told CNBC. The investor also said he plans to sell federal debt and purchase more gold and silver.
So if Jim Rogers is correct, then investors should expect big things and rising trends from precious metals in the next four years. But with all kinds of precious metals investments to choose from, the landscape can be confusing. There are some risks to be considered before deciding to invest in gold and silver.
The biggest risk to gold is a liquidity crunch like the one we saw in the financial crisis of 2008. The trigger for an event like that could be Europe, which continues to struggle with too much debt and shortages of tax revenue.
Although the region continues to combat its financial problems, margins calls for big investment banks and intuitive traders would weigh on gold and silver. Jim Rogers is bullish on gold and silver, projecting that the next four years will look much like the last four years for precious metals.
Investors should prepare for rising prices and more expansionary monetary policy.Investors all over the world take note when the legendary Jim Rogers makes any market prediction. And the billionaire is now warning that one sector of the market is "priced in lunacy," so he is betting heavily against the group.
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