After five days of declines, I'm glad that the Sokoman Minerals stock plunge as ended.
With Gold prices taking a big plunge this morning for no legitimate reason as its down over $60.00 US per ounce in favour of unreliable investments like treasuries and bonds (i'll explain how bonds work next), most Gold stocks will take a beating today.
Back to treasuries and bonds, they are not reliable investments due to a fact that interest is not compounded, and the bond yields don't change when market rates go up.
For example, if I purchase a 20 year bond worth $10,000 with a coupon rate of 5%, my annual bond yield will be $500.
Unlike your savings account which is compounded, the bond yield remains the same.
If the market rate increases to 7%, not only will be the bond yield remain the same, the present value of that bond actually goes down, meaning it will be sold at a discount.
Only way to make money off bonds is if the market rate goes down, resulting in the present value of that bond to go up.
The unreliable nature of treasuries and bonds is a reason why investors should use their heads, especially American ones, and DON'T BUY THEM.
Buy Gold instead.