What should the average investor put their money into when oil and gold start to drop?

Gold has been doing well and oil has been through the roof...but eventually the price will fall again and I don麓t want to be left holding the knife. What commodities/ securities/ investments will be increasing when oil and gold retrace?What should the average investor put their money into when oil and gold start to drop?
That depends on WHY they might drop.





Oil could easily drop on one of several reasons: (1) OPEC cashes in on the oil futures by which they are propping up the prices with right now (look at historic trading volume); (2) the 'go green' movement makes substantial gains and no longer needs the amount of oil; (3) a major economic depression means that folks simply can't buy; or perhaps most importantly, (4) the value of the dollar makes a dramatic rise (likely when the Euro is discovered to be oversold).





Gold is a tad bit more tricky. One possibility for gold to fall is an American or European recession. That could be that people need cash so this group is selling. Parts of the world would be buying, however, so it won't go down a whole lot. India and China are buying it by the boatload, so to speak. Part of that, like in China, is the store of wealth. Europe and the US tend not to monetarize gold in the same way, or to the same extent as we used to. India and oil producing arab countries will be valuing gold for jewelry and decorative purposes. If the U.S. economy tanks, India will suffer, but it will take a great deal for China and arab countries to run out of cash to buy gold. All said, if it does fall, it won't fall a great deal. If nanotech picks up, then true industrial demand will grow (remember what the catalytic converter did for the price of platinum several decades ago? look for it).





As for the oil industry, look for the diversified producers closely. Prices may drop, profits diminish, but true energy producers like Exxon, Shell, and BP will still be uniquely capable of providing lots of varied energy products at a profit. The stock prices may tank for a while, but the truly diversified and really profitable oil companies will be merely a good, discounted buying opportunity. So buy (if you can) and average down your cost basis. They will still be making big bucks if the price of oil were $10 a barrel.





As for gold, many (but not all) REAL PRODUCERS (avoid exploratory stocks like the plague if it looks like gold will be dropping) also have other important elements in their better ore grades. They could continue to dig, but likely stockpile their gold as they produce things like copper and mica (for paints and electrical equipment) in the meanwhile.





So if these things don't look good anymore, then park it in the bank and wait until things turn again. Both of these industrial sectors are immensely valuable, if you spot the most profitable and diversified producers with rich reserves. Not an easy chore ferretting that out, but that's the job investors do, right?What should the average investor put their money into when oil and gold start to drop?
When gold and oil begin falling it will be in response to a strengthening dollar.





'; Average'; investors would be best served putting away money into short term C.D.'s or Treasuries. ';Average'; investors do not trade commodities or currencies.





Those best served trading commodities/currencies always seem to be the traders themselves and not the investors.
your question is relevant if u have been holding oil and gold either directly or indirectly so far. then u hv been enjoying the ride up ...60% in 2007 and another 15% so far 2008 for oil. offset this with the fall in us$ relative to other currencies, the rise is lower. diversification is advisable.


as for alternatives, suggest u understand their exposure and dynamics b4 venturing into them in significant ways. or maybe u could be lucky again ?.... pls dont bet on it
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