I stumbled around an old trading rules list. This one is on Dacharts, quoting 22 rules from Dennis Gartman circa 2005 (link). There are the standard and familiar rules that most traders have heard, but there is also #3 about mental capital.
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Capital comes in two varieties: Mental and that which is in your pocket or account. Of the two types of capital, the mental is the more important and expensive of the two. ...
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Readers know that I am a fan of the concept. Sometimes I cut winners or losers because of the mental wear and tear that riding it out might cause. The most familiar manifestation might be the "sleeping point." During volatile markets, if a person can't sleep at night, sell enough or cover enough so that the risk doesn't keep a person up all night.
I can mention gold. It continues to make new highs. I had a conversation with some younger relatives. I mentioned gold continues to be strong, and one of them replied, "I heard gold was a bubble." This kind of talk is a huge positive for long term gold bulls such as myself. When young people that don't know much, are hearing that gold is bubble, it isn't true.
Just as all the bond market bubble talk makes me more bullish on bonds, gold bubble talk makes me more bullish on gold. To be sure, gold is extended and may correct at any time. However, longer term, I stick to my long standing belief (since 2005) that gold is headed for ~$3000 an ounce.
As for allocations, there is no one size fits all. So much depends on age, income, asset base, risk aversion, life situation, investment knowledge and history, that I never argue about allocations to various classes. There are plenty of other sites or articles that talk about allocations. I see it as highly personal because so much financial and psychological detail need to be provided to give an intelligent answer.
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