Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
except in times like 2008-2009 folks didn't flock in to soy beans , nor even silver or oil . 2008 saw oil plunge more than 50% while gold was up . . gold and treasury bonds were the vehicles of choice until the fear dissolved .
not really , they both may be as speculative or as much a flight to safety as conditions dictate . the night of brexit gold and treasury's soared when the market plunged . the night of the election when stocks plunged treasury's fell and gold soared until the markets sorted things out and digested the event .
they both can run counter to stocks during heavy selling . you never really know which one will be the winner . in my opinion any portfolio that owns gold as a hedge should own long term treasury's as well . in fact many popular portfolio's do just that .
gold is priced everywhere in dollars . it is the exchange rate from local currency to dollars that is variable country to country.
If you want to believe that, great.
The London Fix ? They quote it in £ € $. The trader, buyer, seller in Germany doesn't care what you pay in your isolated compound in Manhattan. The person in 上海, 東京, भिंदी or Москва care not what you in the US pays in your local currency.
I realize that people in New York don't consider backwater locations like Boston, Los Angeles, Chicago or any other place I mentioned above to be significant but <geeze> you're retired. You've got time on your hands. Why don't you try watching the BBC news on PBS with some of that time? You might realize that there is a great big wonderful world out there.
If you have the resources, I think gold and other precious metals have a place in everybody's portfolio, especially if you risk pool.
The more assets you can include in your portfolio the less likely you'll be exposed to idiosyncratic risk. Gold is sometimes utilized as a safe haven when other assets are not performing, so it can protect you from the overall systematic market risk.
Will gold go down? Of course. Do people still believe in efficient markets?
The world just gained 1.6 billion potential gold investors. Interesting to learn that these new buyers will apparently hold physical gold, rather than trading paper positions:
“Until now, there have been no such rules. The new Standard shows that investment in gold is permissible provided that all the relevant Shari’ah rulings are satisfied, including those relating to taking possession of gold and the proper calculation of Zakah,” the statement said.
If you have the resources, I think gold and other precious metals have a place in everybody's portfolio, especially if you risk pool.
The more assets you can include in your portfolio the less likely you'll be exposed to idiosyncratic risk. Gold is sometimes utilized as a safe haven when other assets are not performing, so it can protect you from the overall systematic market risk.
Will gold go down? Of course. Do people still believe in efficient markets?
as i said in my previous post , playing with the actual data was quite surprising . the fact was that the popular portfolio's with fairly large positions in gold seemed to do very well on a risk adjusted real return basis compared to those that didn't .
the gold does not add much gain wise but it seems to set a higher floor over long periods of time that keep portfolio real returns from dipping down as far in down trends ..
the end result is the same or better real returns than the no gold portfolio's but with more compressed peaks and valley's as well as lost money less times .
it just seems the sum of the parts of a well designed portfolio end up being greater than the parts individually when they work as a team .
Quote:
Originally Posted by mathjak107
forget about all this last man standing stuff and zombie attacks .
i was playing around a fairly new site that can compare all kinds of popular portfolio's in use .
what i found interesting is that many of the portfolio's that use gold in them in fairly high proportions have had real returns over long periods of time on par with more conventional portfolio's that don't .
but the bigger aspect is they tend to have smaller deviations and swings , less losing years and have hit their average real returns more times historically .
it appears that while gold does not usually do much return wise what it seems to do is set a floor when other assets have negative real returns . that floor seems to give the portfolio's better risk to reward , smaller swings and in some cases better returns .
i spent a few hours looking at this stuff and it was a bit surprising . of course the past may not be the present but it does make you think a bit .
gold is an asset that really does not do much more long term then track inflation , if it even does that .
but yet when it interacts at the times other assets falter the mere fact it stays close to a positive real return seems to add more value than the sum of the individual parts .
one of the best performing over time has been the golden butterfly . it has surpassed most others on a risk adjusted basis .
that is a recent creation that tried to take the weakness's of the past under various scenario's that were both good and bad for stocks and fine tune them out .
anyway , you can play for hours here doing all kinds of comparisons .
so as an example looking at a total stock market investment going back to 1972 the real return average is 7.50% , the std deviation is about 17.70% , it lost money 32% of the time and made it's average only 14% of the time .
a classic 60/40 portfolio had a real return average of 5.80% , a std deviation of 11.60% ,lost money 30% of the time and made its average 30% of the time .
now the fun comes : something like the golden butterfly which is 20% cash or short term bond ,20% gold ,20% long term treasury bonds ,20% s&p 500 and 20% small value did very very well considering most of us would never do that because of the gold , the cash and the volatility of long term bonds .
but the combo of the cash or short term bonds with the long term bonds actually act as a barbell with a duration around an intermediate term bond fund . but with a higher yield and a lot more oomph in a flight to safety .
so the golden butterfly clocked in with a 6% real return average , only a 7.80% std deviation , lost money 20% of the time and hit it's average 45% of the time .
that combo was the best risk vs reward out of all the other popular portfolio's . it had a hefty 20% in gold .
you can look at lots of things like sensitivity to the time frame you started as well as any time frames you like on all the portfolio's . kind of adds some new thinking for the use of gold that is not a disaster hedge in a portfolio and in heavier proportions .
we wil have to see how some of these do in a rising rate scenario . so far a lot of froth has been removed from long term bonds and gold making this interesting to watch going forward as if you were starting now . .
Last edited by mathjak107; 12-06-2016 at 03:50 AM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
