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Old 11-25-2020, 07:41 PM
 
Location: Wartrace,TN
7,880 posts, read 12,589,105 times
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Quote:
Originally Posted by OhioJB View Post
When interest rates finally rise the price of gold will crash. Investors put their money in gold when rates are low, and switch to government bonds when rates are high. With Yellen likely being the next treasury secretary rates should stay low, but rates can't be held down forever.
How can we return to normal interest rates when our national debt is 27+ trillion dollars? Debt service at 2% on 27 Trillion would be 540 billion a year. At 4% we would be paying 1.8 trillion per year. 8% 3.6 trillion per year.
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Old 11-25-2020, 09:11 PM
 
Location: Honolulu
1,885 posts, read 2,505,327 times
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OP just cherry picked dates. Means nothing. As others pointed out gold has outperformed stocks over other time periods. I did some research comparing gold vs total U.S. stock market return with distributions reinvested. Looks like over most long term (10, 20, 30 + years) time periods going back 50 years, equities does indeed outperform gold, often by a wide margin. Doesn't mean gold doesn't have its place in certain portfolios. Personally since I have 20+ years before expecting to cash out any of my investments, I'm almost 100% in US equities. Later I may buy some gold ETF as part of an all weather portfolio but right now I'm willing to take the riskier position with expected higher returns of 100% stocks.
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Old 11-25-2020, 09:49 PM
 
2,668 posts, read 2,590,809 times
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Quote:
Originally Posted by jdhpa View Post
Someone who keeps x% of their portfolio in gold has seen basically no return on that portion of their portfolio for 9 solid years. Do you think it was a good idea to keep a percentage of one's portfolio in gold? If so, why? For reference, SPY is up ~245% over that same time frame.
Quote:
Originally Posted by WannabeCPA View Post
OP just cherry picked dates. Means nothing. As others pointed out gold has outperformed stocks over other time periods. I did some research comparing gold vs total U.S. stock market return with distributions reinvested. Looks like over most long term (10, 20, 30 + years) time periods going back 50 years, equities does indeed outperform gold, often by a wide margin. Doesn't mean gold doesn't have its place in certain portfolios. Personally since I have 20+ years before expecting to cash out any of my investments, I'm almost 100% in US equities. Later I may buy some gold ETF as part of an all weather portfolio but right now I'm willing to take the riskier position with expected higher returns of 100% stocks.
Can you say, specifically, what benefit someone who kept a large percentage of their portfolio in gold over those 9 years received in exchange for getting no return on their investment?
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Old 11-26-2020, 03:32 AM
 
105,674 posts, read 107,628,943 times
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Quote:
Originally Posted by leastprime View Post
my GLD investment -4.01%, 2020,
GLD etf has a high share value. It consumes a big part of one of my accounts. This prevents a proper diversification.
In a rising Market, GLD will fall. I had expected the Market to fall-my bad.
for 2020 gold has accounted for 62k of my gains ... that is 2nd to my fidelity contra fund which generated 97k in gains.
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Old 11-26-2020, 03:35 AM
 
105,674 posts, read 107,628,943 times
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Quote:
Originally Posted by jdhpa View Post
Can you say, specifically, what benefit someone who kept a large percentage of their portfolio in gold over those 9 years received in exchange for getting no return on their investment?
if you rebalanced those up years when gold was up and harvested the gains and bought other assets you benefited ,

but the point is this :

i can cherry pick 10 years where stocks returned zero too. in fact inflation adjusted markets took 12 years to recover from 2000 including all dividends reinvested .

how about if we cherry pick 2000-2010

10k in stocks grew to 11,396 with dividends , gold grew to 47,751 .

how about if we rebalanced that 47, 751 in to equities re-establishing our original allocation back ? how much more would that have grown by today vs a 60/40 portfolio of agg and voo ?

anyone can isolate any asset including stocks and find a time frame it sucked .


in fact if we left gold totally isolated it did better the last 20 years than stocks did .

10k in gold is 60,374 , 10k in us stocks 34,980 ....what did gold get you for the last 20 years ? almost 2x the balance equities left you with, is what it got you .

read that again .

Last edited by mathjak107; 11-26-2020 at 04:24 AM..
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Old 11-26-2020, 10:29 AM
 
11,610 posts, read 10,282,114 times
Reputation: 7213
Default Pax Gold, other gold-backed stablecoins

My investment interest in gold rests on the potential catalyst of massive gold demand created by the emergence of gold-backed crypto coins, such as Pax Gold.

https://www.coindesk.com/binance-exc...cryptocurrency

Perhaps I'm wrong. Can anybody offer an explanation of why anybody would prefer Bitcoin over a gold-backed crypto coin, other than uninformed speculative demand offers significant volatility and profit potential for the skilled trader? Unless gold-backed crypto coins are outlawed by governments using depreciating fiat currencies to monetize national debt and deficits, why wouldn't anybody prefer to keep their liquid assets in gold-based crypto currencies, especially if some reputable, insured financial institution will pay interest on gold-back crypto currency deposits?

A key development will be when financial institutions begin to pay interest on gold-backed coins and to make loans in the coins. Obviously, this won't happen until signficant inflation forces central banks to raise interest rates on fiat currencies to avoid runaway inflation. Until then, anybody able to borrow in fiat currencies, especially at fixed rates, will do so as they likely will have negative real yields over the life of the loan. My theory is that at some point, fixed-rate loans no longer will be offered in many fiat currencies, including the U.S. dollar. For borrowers seeking stable borrowing rates, gold-backed crypto coin borrowing may be the only option.

I lived through the Great Stagflation of the 1970s and early 1980s. The next time around, which may occur in the next few years, I don't see how the U.S. emerges without creating a new dollar, as happened in the Weimar Republic after the hyperinflation there liquidated debt denominated in old marks. Does everybody forget that Donald Trump advocated for bankrupting the U.S., and yet he was able to take over a "conservative" party and garner almost 74 million votes in his reelection bid? Several decades ago, when Depression babies still dominated the economy and the political arena and financial rectitude was a creed, a Donal Trump would have been a political impossibility.

https://www.cnbc.com/2016/05/06/dona...n-us-debt.html

Famed economiic prognosticator Nouriel Roubini expects a Greater Depression within several years, but one that will be inflationary, perhaps hyper-inflationary.

https://finance.yahoo.com/video/nour...201457486.html

Do Republicans seriously want to bankrupt state and local governments?

https://www.thenation.com/article/so...s-immigration/

Will a gold-backed Chinese cryptocurrency become the new reserve currency sometime in this decade?

https://seekingalpha.com/article/436...tal%20currency.

What am I missing?

Last edited by WRnative; 11-26-2020 at 10:47 AM..
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Old 11-26-2020, 10:32 AM
 
105,674 posts, read 107,628,943 times
Reputation: 79318
Gold has a 5000 year history ....I would never mix it with crypto which if govt wants they can control.

The closest is the new gold digital format released by Perth mint

https://www.perthmint.com/goldpass.a...8aAkPsEALw_wcB
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Old 11-26-2020, 10:45 AM
 
Location: SoCal
20,160 posts, read 12,650,485 times
Reputation: 16993
Quote:
Originally Posted by leastprime View Post
my GLD investment -4.01%, 2020,
GLD etf has a high share value. It consumes a big part of one of my accounts. This prevents a proper diversification.
In a rising Market, GLD will fall. I had expected the Market to fall-my bad.
How could this be? According to yahoo finance which isn’t always update property, ytd for GLD is up 23%. You must not own it for a while. I don’t own any, I’m just curious.
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Old 11-26-2020, 10:46 AM
 
105,674 posts, read 107,628,943 times
Reputation: 79318
Quote:
Originally Posted by NewbieHere View Post
How could this be? According to yahoo finance which isn’t always update property, ytd for GLD is up 23%. You must not own it for a while.
he trades it so he bought high and sold lower .
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Old 11-26-2020, 10:53 AM
 
11,610 posts, read 10,282,114 times
Reputation: 7213
Quote:
Originally Posted by mathjak107 View Post
Gold has a 5000 year history ....I would never mix it with crypto which if govt wants they can control.

The closest is the new gold digital format released by Perth mint

https://www.perthmint.com/goldpass.a...8aAkPsEALw_wcB
Gold in the safe is not a currency. Modern economies need modern currencies. The question is why would anybody prefer a speculative crypto currency or a fiat currency with no intrinsic value over a gold-based crypto currency. And I agree I would prefer a crypto currency issued within a nation with relatively little debt, such as Australia and Canada, therefore with less incentive to confiscate gold-based currencies.

I would prefer a Canadian crypto gold coin because it will be one of the few nations not eviscerated by inevitalbe climate change impacts in coming years. Apart from invasion by the U.S., perhaps a risk in the decades ahead, Canada faces little geopolitical risk, unlike Australia, a tempting target for China when the U.S. no longer is a viable defender.

Last edited by WRnative; 11-26-2020 at 11:07 AM..
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