Gold and gold-focused exchange traded funds (ETFs) are a hot topic of late, and Jim Rogers is on board as a gold investor. But can Average Joes be successful investing in gold using Rogers’ method?

Rogers buys gold whenever he thinks about it, says Przemyslaw Radomski for the Associated Press. He doesn’t wait for the International Monetary Fund (the world’s third-largest owner of gold reserves) to buy – he just does it whenever he has the chance, whether the prices go up or down.

But is buying gold wherever and whenever a strategy that works for most investors?

For all of its appeal as a safe haven, gold can have its share of risks, too. While gold is less volatile than many investments, including the S&P 500, it’s no stranger to spikes and dips in its prices. For that reason, tactical investors should have a strategy. We use the 200-day moving average as a buy and sell guide: when a position is above its 200-day, it’s a buy signal. When it drops below, or 8% off the recent high – whichever comes first – it’s a sell signal.

Having a buy and sell strategy (if you’re not in it for the long haul) can help you enter a position in time for any potential long-term uptrend, put a cap on your losses and subtract any emotion that may have entered the equation.

  • iShares COMEX Gold Trust (IAU): up 7.4% year-to-date

ETF IAU

  • SPDR Gold Shares (GLD): up 8.3% year-to-date

ETF GLD

  • PowerShares DB Gold (DGL): up 6.4% year-to-date

ETF IAU

For more stories on gold, visit our gold category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.