Maintaing Status Quo in Era of Financial Repress.

[UT1986]

Might be a good idea to add a little luster to your portfolio, if this recent historical trend continues.
The Link

 

[mcbrett]

A chart showing gold prices is cute if you start it in 2008 or 2009. If you show a chart of gold prices since the 1950's or so- you will wish you had a way to short it right now. Long term, historic returns of gold are 1-2% (aka inflation.) A 50% rise in one year is what we call a shorting opportunity.

Here's another way to look at it- and I quote a wiser investor than myself, Warren Buffett, if you could build a square block in Manhattan of pure gold at today's prices, you'd have enough money to own all American equities.

Meaning- which one is overvalued- the square block of gold, or ownership of every single company, their earnings, and future earnings?

I'd take the equities over the gold.

And, if anyone ever tells you why you should invest money in a commodity, and their investment rationale involves their personal politics- do the exact opposite of whatever that person does.

 

[charloscarlies]

In reply to:

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[rickysrun]

Gold needs a new messenger. Pawn dealers, glenn beck and g gordon liddy don't give me warm cuddlies.

 

[charloscarlies]

Notice a trend?

Looking simply at historic gold prices w/o context is completely worthless.

 

[UT1986]

Hadn't had a chance to respond. Couldn't have said it better myself Charloscarlies!

Yeah, you wouldn't have wanted to own gold during the boom times of the 80s and 90s, but it's a great inflation hedge and we are going into hyperflation mode. Stocks have historically outperfomed gold, but in the last 8 to 10 years, most stocks have lanquished in neutral. Look at the S&P 500, look at your portfolio, has it really recovered from the moonshot of the tech boom?

I'm going to add some more gold to my porfolio. As long as interest rates are kept low and the Fed keeps printing money like its going out of style, a small portion of gold is a good thing for your portfolio. Funny how the MSM financial experts have been marginalizing gold ever since it was around $500/oz, saying it would never go much higher. Well, despite the recent correction, gold is nearly $1,800/oz and will continue its rise upward. Many foreign investors see gold as one of the only areas where they are confident in it's value as compared with the USD. The price of gold compared with every major currency has increased. The JPMorgan's and Goldman Sux have been shorting gold heavily for years in an effort to suppress the price. That failed and now they've said recently gold is a good investment. Hmm. Go figure.

 

[Ag with kids]

Gold stayed static in actual dollars for 25+ years...so, if you'd invested in it in the late 70s, you would have lost a ton of money in real dollars...$300 gold in 1978 is worth a TON more than $300 gold in 2005.

Hell, with inflation, those folks who purchased it in the late 70s are probably just now finally making a positive ROI...

I'm quite sure that those folks who purchased gold in the late 70s to early 80s expected it to keep going up, too...

 

[UT1986]

I guess you guys that bash owning gold assume you have to buy and hold it forever. Nobody's saying that gold has historically outperformed stocks, but in the currrent environment, it's doing a helluva lot better than stocks. It's about understanding the cycles in the market and adjusting to maximize portfolio gains in your 401K. Just like stocks, you can buy and sell and make profits. If you believe in only maintaing a portfolio of stocks/bonds until you retire, you might be surprised in 15 years that your portfolio won't be worth what you would like it to be. So go ahead....buy and hold and hope for the best.

My portfolio has been doing nicely in the last 5 years by being a contrarian in this market, while most sheeple were afraid to open their latest 401K statements.

 

[charloscarlies]

It obv doesn't show up to 2011 where gold REALLY started to take off, but as you can see gold and the DJIA have each performed better than the other at various times. Looking at the charts I posted earlier, the performance of gold is very closely correlated to the money supply (as expected). During the 80's and even some of the 90's, the money supply wasn't growing anywhere near the rate that it is today. THAT is why people are buying gold and that is why the price will continue to rise until Helicopter Ben retires his printing press.