Is there a bubble in gold? Liz Weston thinks so.  And if you talk to Matt at Steadfast Finances, he’ll be quick to agree.

I’d concede there’s definitely a boom or “bandwagon” effect happening with money flowing into gold right now, but I’m not convinced it can be called a bubble in the same way that there was a dot-com bubble.  Bubbles are ephemeral and when they pop, suggest that there had been nothing there in the first place.  I don’t think that’s the case with gold, which is arguably the oldest, most durable asset around.

That said, it would have made much more sense to invest in gold back in August or the beginning of September.  Estimates now are $1200/oz and I’ve even seen $1500/oz over the next year – and these are average analysts making the calls, not Marc Faber.

US Real Estate, High-Frequency Trading and Specialized ETFs

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Everyday Finance tells us about yet another gold ETF, this one even more volatile than the last.  The Van Eck Market Vectors Junior Gold Miners ETF is a basket of about 38 securities – all of them “junior” gold miners.  If you don’t know what that means, this ETF is definitely not for you.  It means these are all gold companies in the first or intermediate stages of exploration.  Which means they haven’t necessarily turned any profit yet, and they may never.

Pat McKeough (TSI Network) warns us of the risks of real estate investing in the US sunbelt.  One risk Canadians might not think so much about, ironically, is the weather.  It isn’t sunny and warm all the time in Florida and California.  If there’s a colder season, will your condo still rent out just as well? Not to mention all the related problems with investing in the areas most affected by the subprime fallout.  California in particular isn’t looking good at all.  Check out this list of the most-broke U.S. states before you buy.

Dana at The Investoralist explains the four reasons to be bullish on Canada (but Canadians already knew all this, right?:)).  This post was written back in April, but still worth a read to see it from a non-Canadian perspective.  I really like what Dana has to say about a lot of economic and cultural trends – she has a broad perspective informed by a lot of international experience.  You should really follow her on twitter too – she passes on tons of great info and articles.

Preet Banerjee at Wheredoesallmymoneygo.com explains high-frequency trading and all the kafuffle it’s created over the last little while.  High-frequency trading doesn’t refer to your average day trader.  We’re talking computer-traders here.  Automated algorithms that work at “lightning-fast speeds.”

Thicken My Wallet considers some of the problems of specialized ETFs.  In the past year or so we’ve seen more and more actively managed ETFs and now also leveraged and double-leveraged ETFs.  Are these exotic instruments not transgressing the original goals that ETFs were aiming for?  ETF buyers beware: know your ETFs before you purchase.

Kathryn at Million Dollar Journey reconsiders some common limiting beliefs about money. Always good to hear these from another person’s perspective.  Plus, she takes a close look at the “things she knows for sure.”  What do I know for sure?  I wish that I had invested even more aggressively (saved more, put more into stocks) even earlier than I did.

How Big Can the Bubble in Gold Get?

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Bubble, boom, or bandwagon, it’s happening.  Just take a look at some of these recent developments.

6 Reasons The Price of Gold Continues to Rise (Nov. 10, 2009)
Gold Now Used As Money at the Chicago Mercantile Exchange (Oct. 20, 2009)
Scotiabank Now Sells Gold Online (Sept. 30, 2009)
Barrick Gold Removes Hedges Against Gold Price (Sept. 10, 2009)

If any of your investments have run up 80-100% or more, you might want to consider taking part of your position in profits and reinvesting elsewhere just to protect yourself.  Either that, or move it out of pure growth plays and into income-oriented stocks to help you lock in returns while you wait.

I don’t think you should really worry about anything over the weekend, of course – but don’t forget that Sunday in the Western hemisphere is already Monday in the East – stock markets open again around 3pm EST, beginning with Auckland, then Sydney, then over to Toyko and Hong Kong.  Central bank purchases of gold can send the price soaring long before European and North American markets open.  Just in case you want something to look out for.

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Tagged as: bullish, Canada, ETF(s), gold, gold bubble, gold miners, link roundup, Liz Weston, Million Dollar Journey, Pat McKeough, real estate, Thicken My Wallet, trading, Wheredoesallmymoneygo