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In the last ~9 years, the total return on gold is approximately 0.78%.
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.
In the last ~9 years, the total return on gold is approximately 0.78%.
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.
in the mean time gold beat equities the last 20 years , the last 15 years , the last year and ytd ...cherry picking dates means nothing.
especially if the gold is used in a portfolio strategy ..gold holds a positive real return in most bad down markets so it tends to buy far more equities then cash would for the up cycle.
if you put 10k in gold in 2000 and in to the us equity market your gold is 60,374 , the market 34,980
if you bought the same 15 years ago gold is 40,229 and us equity market 37,610 and that is no rebalancing
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.
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.
this may be false if rates rise and inflation rises and real returns on cash instruments are negative. gold does well when real returns are negative no matter where rates are
gold is linked most to negative real returns on cash regardless of rates ..if inflation turns the real returns negative , gold thrives .
the shaded areas are when real returns on cash was negative .
just the fact gold has beaten equities the last 20 years and last 15 years says it is as good an investment as equities can be under the conditions it thrives in .
all assets do best when conditions are right for it . gold has done fine for 20 years with no hyper inflation at all .
If inflation returns, real estate will do well. Isn’t that a better hedge.
only up to a point . once inflation gets to high real estate does poorly . real estate only picked up again when high inflation fell in the 1970's .
but real estate is way to localized as well as " wife dependent " to be a good judge for measuring outcomes .. there can be 50 homes for sale but the one my wife likes sells while the others may sit.
real estate is not something that holds true area to area ... our old home in the poconos has not even rebounded to the price we sold it at in 2012 .
on the other hand the manhattan co-ops we had soared over the same time frame .
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