goldbug1
Long

Gold - Is It A Store of Wealth or a Pet Rock?

FX_IDC:XAUUSD   Gold Spot / U.S. Dollar
Nothing like getting a comment from a "analyst" that gold' is NOT a store of wealth. In fairness we hear this all the time, invest in stocks and bonds gold' is simply a "pet rock". I find the irony that these so called "analysts" can actually say such a foolish thing. Most have come to think, prior to this chart, that stocks outperform gold' by a long shot. This simply is not true, and I need no more than to pull up a chart for proof.

Keep in mind this does not include dividend reinvestment resulting in compound interest, but to think that gold' is not a store of wealth is ignorance at best. Keep in mind gold' has been in a multi year bear market while the stock markets have been in a bull market for nearly a decade.

The Nasdaq often outperforms the market during bull runs. Clearly this is the case once again. Yet the last time the Nasdaq outperformed gold' was in the late 90's and we all know what happened next. It took nearly 16 years for it to catch back up. Are we getting close to the end of the bull stock market run?

With the markets on a multi year bull run, and gold' in a multi year bear, what better time to start shaving off some profits from the market and buy gold? Nobody knows what the future holds, but one thing we all know to have been proven over time. Gold' is a store of wealth. Don't believe me look at the chart.

I still like silver' here and will be posting an article on how to buy silver' and gold' like a dealer. Many often do not realize that they are simply paying too much a premium for the metals they buy.

Slowly buying a little metals here and there over time will pay off. Look at the chart and say to yourself, do I want to put money in a 9 year bull market, or buy gold' and silver' which has been in a 7 year bear market. Sure they tell you gold' is enough for a portfolio, but is it?

So why do analysts tell you to limit your gold' holdings when the evidence is so clear? You think the banks and brokers make money if you buy gold? This is the same reason they are anti-Bitcoin. It cuts into their profits or in Bitcoin's case will cut them out of fees

Diversification is just that. Owning stocks, real estate and gold' . Does not hurt to have a little Bitcoin' exposure. Same concept with gold' it is a store of value and limited supply.

Long Gold!
Comment: Here is a chart that shows the returns with dividends reinvested. Keep in mind that Gold has been in a multi year bear market, and the stocks in a bull. All trends come to an end.

https://www.longtermtrends.net/stocks-vs...
It is a store of wealth if you got where to store it. I presume you Goldie store it da old fashion way, in a bug ol chest. Or is it a pot like that of a leprechaun? Or maybe, since you are Gold bug you are made of gold yourself. In any case, good points, good 4th grader analysis. Like!
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the comparison was made for 50 years, if you do it on all other options stock outperform gold for a lot
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@amussic, Keep in mind prior to going off the gold standard gold was pegged $35/oz. Since this was 40 years ago, stocks would outperform for sure.

Also keep in mind that it is not the objective to say that gold is better than stocks, the point was to show that gold has been a valid investment.

Thanks mussic
+1 Reply
amussic goldbug1
@goldbug1, I agree, and having assets spread into stocks, metals, crypto, ... is the best thing you can do for your portfolio
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@amussic, dont forget to buy some canned sardines. you will be glad you did.
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"I still like silver' here and will be posting an article on how to buy silver' and gold' like a dealer. Many often do not realize that they are simply paying too much a premium for the metals they buy." really like this article and cant wait for the next one
+2 Reply
Depends on when you ask me ;)
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This assumes physical assets continue to retain value. What happens when the marginal cost of production approaches zero?

There is no substitute for creativity in any field - deferred storage of physical wealth is due to become an anachronistic paradigm within fifty years, during which there will be an increasing emphasis on the abstract and virtual instead of physical.
+1 Reply
@RamonP, I'm not sure physical gold is going anywhere even with the advent of asteroid mining ;) It is baked into our DNA
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