in the event of a stock market rally, i don't think the money that goes into the broad market will come out of mining stocks. i think it will come from the cash waiting on the sidelines that is currently earning near-zero per cent interest. many investors are sitting on cash because they are afraid to own any stocks. if they become confident enough to invest, the broad market could rally, but i don't think that would affect gold stocks.

we are heading into the strongest time of year for gold, and i expect to see a strong rally from these depressed levels. the rally actually started two months ago, and some quality companies are already up 200% from their panic lows. although i am the worst short term timer in the world, i think we could see a rally in mining shares carry through the next few months. then the "sell in may and go away" crowd may decide to cash in, so if all goes well until then, i will take some money off the table before the traditional summer weakness in the precious metals.

i have learned my lesson from last year, and i don't need to go through another complete disaster like summer, 2008. at least this way a summer sell-off will only be a mitigated disaster, unlike last year's unmitigated disaster.

but going forward i think energy is still incredibly undervalued. if i were not fully invested now, i would be adding energy positions, whether through the etf's (uga, uso, ung) or the energy trusts with 20%+ dividends, or even a mutual fund like dig. the mining shares have already had a huge move, and the energy shares are still priced like we will have $40 oil forever. actually yesterday was a better time to invest, since the oil stocks did very well today, but they are still so cheap that i think you can get outsized returns from the quality companies, and there is no need to take on additional risks with juniors.