I was reminded this week to take a look at the performance of my trend-following system for gold (GLD), and the answer is: it stinks. It’s true that it caught chunks of the big swing in late 2007 into mid 2008, but besides that it has just chopped around. I bet this is the case for everyone who has tried to trade gold off the weekly charts.
I’d wager $20 that no one can show me an audited trading record for any system that has traded GLD since its inception that has beaten simply buying and holding GLD since then.
UPDATE: GLD is up around 150% over the last five years, which is just over 20% annualized.
Here’s a chart showing our current GLD entry. Remember that I put my own money behind every idea in my newsletter and I too bought gold back in early November 2009. If you’d like to become a subscriber, just drop me a line for details.