How much Gold do you own and why?

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gwe67
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Re: How much Gold do you own and why?

Post by gwe67 »

Ocean77 wrote: Fri Jul 30, 2021 10:55 am
gwe67 wrote: Fri Jul 30, 2021 10:49 am This subject has been covered ad nauseum, but here's an example of why gold is such a ripoff. Yeah, I know there are lower prices available, but index funds don't charge purchase fees, storage fees, or selling fees. Cost to own gold for 5 years using this broker = 1.4%. Cost to own VTI for 5 years = 0.15%.
You should compare apples to apples:
1. Compare buying/selling a stock index fund/ETF vs a gold ETF, or
2. Compare buying/selling a business, factory or rental building vs physical gold
1. The SPDR Gold Shares GLD charges 0.40% annually, or 2.00% over five years. Worse buy than physical gold.
2. Rentals are typically an even worse investment than gold, but I've argued that point many times as well.
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bigdog34
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Re: How much Gold do you own and why?

Post by bigdog34 »

About a year ago I started to hold about 7.5% gold in IAU (spread across taxable and tax advantaged).

From 2015-2020 I listened to a buddy talk about his gold holdings and I dismissed the idea of allocating to it based on all of the arguments in this thread. As my net worth grows and I get increasingly uncomfortable with equity valuations, I simply don't want more than 80% in equities (but didn't want 20% in bonds based on my age and interest rate environment). So, that led me to research the diversification benefits of gold. So far, I've been very happy with it.

Strange to me that so many here are vehemently anti gold "because it doesn't produce anything..." yet Bogle himself admitted to a 5% allocation. My theory would be that people didn't like his reason for holding it (hedge against collapse), and therefore ignore what I think is the best reason to hold it (diversification benefit).
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Ocean77
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Re: How much Gold do you own and why?

Post by Ocean77 »

Regarding those "Mad Max" scenarios, I always find it funny how on one hand, people point to multiple centuries of stock and bond charts and conclude these are sound investments and the future will be similar as the past and provide good returns for these assets. Then on the other hand say that holding gold makes no sense because the future could be totally different than the past and involve armed gangs breaking down your front door to loot any physical gold you may have.
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Re: How much Gold do you own and why?

Post by Old Guy »

I have some gold and silver coins. They’re nice looking. I don’t regard them as investments but sort of like art to be looked at and admired.
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Ocean77
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Re: How much Gold do you own and why?

Post by Ocean77 »

gwe67 wrote: Fri Jul 30, 2021 11:06 am
Ocean77 wrote: Fri Jul 30, 2021 10:55 am
gwe67 wrote: Fri Jul 30, 2021 10:49 am This subject has been covered ad nauseum, but here's an example of why gold is such a ripoff. Yeah, I know there are lower prices available, but index funds don't charge purchase fees, storage fees, or selling fees. Cost to own gold for 5 years using this broker = 1.4%. Cost to own VTI for 5 years = 0.15%.
You should compare apples to apples:
1. Compare buying/selling a stock index fund/ETF vs a gold ETF, or
2. Compare buying/selling a business, factory or rental building vs physical gold
1. The SPDR Gold Shares GLD charges 0.40% annually, or 2.00% over five years. Worse buy than physical gold.
2. Rentals are typically an even worse investment than gold, but I've argued that point many times as well.
My ETF (SGOL) charges 0.17%. With the amount of money I have in it (about $100k), it is a rounding error.
30% US Stocks | 30% Int Stocks | 40% Bonds
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retired@50
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Re: How much Gold do you own and why?

Post by retired@50 »

Ocean77 wrote: Fri Jul 30, 2021 10:45 am It's funny, I know this chart and it is the reason I own gold. Not as a replacement for stocks of course, but for a portion of our cash holding. The chart shows that unlike cash, gold maintains the purchasing power over time.
I tend to see gold as a "risk asset" instead of a replacement for cash.

I'm trying to wean myself off an emergency fund since cash loses to inflation over time, but there is the sleep well at night factor. I might be able to reduce the emergency fund once I'm old enough to make penalty free withdrawals from my retirement accounts. Still waiting for 59.5.

Regards,
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Maverick3320
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Re: How much Gold do you own and why?

Post by Maverick3320 »

None - what's the point. It's not a great alternative investment, produces nothing, and if the world goes to hell, I'm not going to be able to barter with it.
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Re: How much Gold do you own and why?

Post by Maverick3320 »

HanSolo wrote: Thu Jul 29, 2021 5:54 pm
Da5id wrote: Thu Jul 29, 2021 5:45 pm
If you do not invest in gold, please do not answer. I am looking for reasons to invest and not why not invest.
Regardless of the topic, that is requesting an echo chamber be constructed. Seems like an odd way to get balanced input needed to sort out a question in your mind.
That's an illogical assertion. If someone asks people why they like traveling to Macedonia, it's perfectly reasonable to try to get responses from people who actually travel there, rather than getting 99% of responses (perhaps an "echo chamber" as you call it) saying "I've never been there". Claiming that this would be "constructing an echo chamber" is illogical.
Pretty poor analogy. A closer one would be, "do you travel to Macedonia, and why?" and then having the OP reject any "no" responses.
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Re: How much Gold do you own and why?

Post by JayDee37 »

gwe67 wrote: Fri Jul 30, 2021 11:06 am 1. The SPDR Gold Shares GLD charges 0.40% annually, or 2.00% over five years. Worse buy than physical gold.
2. Rentals are typically an even worse investment than gold, but I've argued that point many times as well.
There are cheaper gold ETFs. The SPDR Gold Shares Mini GLDM has an ER of .18.
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Re: How much Gold do you own and why?

Post by nigel_ht »

gwe67 wrote: Fri Jul 30, 2021 11:00 am
It is happening in Venezuela.
The USA has sanctions against Venezuela, causing inflation and economic mayhem. There isn't another country that is able to put sanctions against the USA. The OP is from Israel, and holding gold may be desirable there for political or other reasons, but that's not the case in the USA.
If you are asserting that hyperinflation is extremely unlikely to happen in the US I would agree. It’s not impossible though.

In any case the point isn’t whether it could happen here but that folks claiming gold wouldn’t be useful during hyperinflation are incorrect.
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Re: How much Gold do you own and why?

Post by suemarkp »

gwe67 wrote: Fri Jul 30, 2021 10:49 am This subject has been covered ad nauseum, but here's an example of why gold is such a ripoff. Yeah, I know there are lower prices available, but index funds don't charge purchase fees, storage fees, or selling fees. Cost to own gold for 5 years using this broker = 1.4%. Cost to own VTI for 5 years = 0.15%.

Image
This is like saying equities are a poor investment and then posting an Edward Jones fee schedule. If you want to invest or even just hold or hedge with precious metals, you need to spend as much time researching where to buy, sell, and store as you would do for anythung else. It isnt hard. Take a day to research it and then go do some trial or pretend purchases or sell backs to see how it really works and what places to avoid.
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nu11p01nter
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Re: How much Gold do you own and why?

Post by nu11p01nter »

I am far from knowledgeable on the subject but, FWIW, I have a target allocation to gold (specifically, ETF GLDM) of 7%, although I'm not there yet. It's strictly for diversification purposes, as there is evidence gold has a low correlation with stocks during sharp market downturns. I'm getting very close to semi-retirement, and I'm uneasy about current US stock valuations, so I wish to guard against a big market downturn right after I retire. The stock/gold correlation doesn't seem to be materially different than the stock/US treasuries correlation, but bonds are unappealing right now given low yields and inflation/interest rate concerns. FWIW, both portfoliocharts.com and portfoliovisualizer.com indicate that a gold allocation materially increases portfolio growth rates compared to bonds, although I do understand that the historical data set for gold is fairly limited.

To put some numbers on it, I ran some illustrative portfolio allocations on portfoliocharts.com :

100 % US total stock market:
  • CAGR: 8.2%
  • Volatility: 17.0%
  • Ulcer Index (lower better): 16.6
  • Max drawdown: 49%
  • SWR: 4.0
  • PWR: 3.5
80 % US total stock market / 20% Intermediate treasuries:
  • CAGR: 7.1%
  • Volatility: 13.9%
  • Ulcer Index (lower better): 12.8
  • Max drawdown: 42%
  • SWR: 4.2
  • PWR: 3.6
80 % US total stock market / 20% gold:
  • CAGR: 7.8%
  • Volatility: 13.5.0%
  • Ulcer Index (lower better): 9.1
  • Max drawdown: 32%
  • SWR: 4.5
  • PWR: 4.0
So, at least as far as portfoliocharts.com is concerned, gold considerably reduces drawdowns and improves SWR/PWR, which are of particular importance to me at this point.

On portfoliovisualizer.com, I ran the same three portfolios mainly to see how they withstood the 2007-2009 crash:

100 % US total stock market: -50.89% (underwater for 4 yrs., 5 mos.)
80 % US total stock market / 20% Intermediate treasuries: -39.62% (underwater for 3 yrs., 2 mos.)
80 % US total stock market / 20% gold: -39.92% (underwater for 3 yrs., 3 mos.)

So, gold only slightly outperformed bonds for drawdown protection (but it should be noted that the gold portfolio had a significantly higher CAGR, 6.64% vs. 5.98% for the bonds portfolio). One might say its a wash, but bond returns were considerably higher during the period of the PV dataset (1972+) than presently and, as noted, I am pessimistic about bonds for the next few years.
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Re: How much Gold do you own and why?

Post by manuvns »

i just have enough to fill up my free safe deposit box .
Thanks!
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Re: How much Gold do you own and why?

Post by seajay »

Ocean77 wrote: Fri Jul 30, 2021 10:45 am
retired@50 wrote: Thu Jul 29, 2021 11:46 am This chart from Jeremy Siegel's book "Stocks for the Long Run" sums it up for me.
ETA: To answer the OP's question, I don't own any gold, and the chart below is the reason why.

Image

Regards,
It's funny, I know this chart and it is the reason I own gold. Not as a replacement for stocks of course, but for a portion of our cash holding. The chart shows that unlike cash, gold maintains the purchasing power over time.
A barbell of no-div-stock/gold could be considered a form of central cash bullet.
Image
... and when cash earns near 8% real - where to invest it for a better return?

That's UK data that also includes good/great 1980's/1990's stock gains. For US data and since 2005 I see its a 7.5% real.
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Re: How much Gold do you own and why?

Post by midareff »

halfnine wrote: Fri Jul 30, 2021 8:46 am
midareff wrote: Fri Jul 30, 2021 7:56 am I remember my immediate post college days when gold was $800 an ounce. Now it's $1800 an ounce. Unfortunately, my immediate post college days were 50 years ago. In 1970 the average closing price of the S&P500 was 83.15, yesterday it closed at 4419.15 you do the math. Gold is what you make jewelry out of because it doesn't corrode on you skin. The S&P is what you buy if you want to own companies that have businesses. I own a couple of ounces of gold, some of it holding really nice looking stones in place.
In 1970 the price of gold was around $38. The math comes out pretty good for that time frame. You should pick better starting dates for your argument.
https://www.macrotrends.net/1333/histor ... year-chart look at a 100 year chart rather than pick arbitrary data point. You are helping to make my point, it's purely speculative. I want to own companies that have business and make and sell products. .. not speculative stuff like gold and bitcoin.
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Re: How much Gold do you own and why?

Post by halfnine »

nigel_ht wrote: Fri Jul 30, 2021 10:54 am
halfnine wrote: Fri Jul 30, 2021 5:36 am 2. Gold to protect against hyperinflation or "Mad Max" scenarios. Gold won't be of too much value during these crises. Once word gets out that you have gold seven armed guys are going to knock down your door at 3 AM and are going to start cutting off little Johnny's fingers until you hand it over. And they will seize your guns, ammo and any other valuables while they are at it.
"“More than half our clients want to pay in gold,” said one estate agent in Puerto Ordaz, who described a recent nerve-racking drive through the increasingly lawless city to broker a deal, following buyers carrying an apartment’s worth of precious metal.

“The client said ‘come in our car’, but I said: ‘No, we are traveling behind you.’ With the insecurity you don’t know who knows you have gold,” added the agent, who is still struggling with the new norms of doing business, and asked not to be named for her safety.

Even the universities have been swept up in the gold rush. “In November, one of the girls who is studying here told me: ‘A degree is not expensive, because its only 2.5g of gold [for a semester],’” said Arturo Peraza, rector of the city’s influential Universidad Católica Andrés Bello. “It was the first time I learned the value of a university education in grams of gold. I could not have imagined it.”"


https://www.theguardian.com/world/2019/ ... rmed-gangs

Yes, if you have a lot of gold and no guards then gangs will come and take it. If you only have a little bit then it has just replaced cash in the local economy. It's certainly not a good place to be but you can't argue that:

a) Gold doesn't get used when money stops working due to hyperinflation. It is happening in Venezuela.

or

b) Gangs will come steal the small pittance that you have any different then they would have done when money had value and you had cash. If this constantly happened then a gold driven local economy seen Puerto Ordaz wouldn't work.
3. Gold to exit the country.
...
My overall point....don't be lured by the ""my grandparents"" success bias stories.
These aren't grandparent success stories. Many of the Vietnamese refugees (boat people) are my age or younger. While I could be a grandparent by now these stories aren't from some ancient time in the past but experienced by contemporaries.

Are they biased? Around 1.3M left Vietnam. The ones that made it here to the US do represent survivorship bias but the outcome was much better than if they had stayed. About 10% died along the way...although some estimates are as high as 300K. 424K made it to the US.

Is it a good reason to hold gold for US citizens? I guess that depends on a lot of factors. Some economic and some personal.
You have selectively edited my posts,which changes the content.

I indicated that gold does has value and can be used to a small extent in a crisis. Particularly gold jewelry if wise about how often and where you exchange it. However, you are not going to be trading significant amounts of gold (particularly gold coins) without undue notice and risk. The fact that a gold mining area in Venezuela has gold making the rounds should be no more surprising than people bartering fish in a fishing town. But it comes with a high price hence the title of the article "Venezuela’s gold fever fuels gangs and insecurity: There will be anarchy". There are plenty of crisis currently happening and that have happened all all over the world in the past 20-30 years. You are welcome to post all the examples where there is/was a gold driven local economy.

As to Vietnam that happened 45 years ago. As I indicated in my original post (which has again been edited out) the world has changed a lot since then. In the current era one doesn't need gold to migrate as there are plenty of ways for you or I to hold other currencies or foreign assets. That and it is getting increasingly difficult to migrate in the current era. Immigration laws are much stricter now and refugee status is much harder to come by. Obviously, and as I mentioned in my post, if you are facing extermination then of course you will leave. But, otherwise, you are likely much better off staying where you are. And if it gets to the point where either you or I need gold for any chance of getting out of the country, we already blew it.
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Re: How much Gold do you own and why?

Post by halfnine »

midareff wrote: Fri Jul 30, 2021 4:22 pm
halfnine wrote: Fri Jul 30, 2021 8:46 am
midareff wrote: Fri Jul 30, 2021 7:56 am I remember my immediate post college days when gold was $800 an ounce. Now it's $1800 an ounce. Unfortunately, my immediate post college days were 50 years ago. In 1970 the average closing price of the S&P500 was 83.15, yesterday it closed at 4419.15 you do the math. Gold is what you make jewelry out of because it doesn't corrode on you skin. The S&P is what you buy if you want to own companies that have businesses. I own a couple of ounces of gold, some of it holding really nice looking stones in place.
In 1970 the price of gold was around $38. The math comes out pretty good for that time frame. You should pick better starting dates for your argument.
https://www.macrotrends.net/1333/histor ... year-chart look at a 100 year chart rather than pick arbitrary data point. You are helping to make my point, it's purely speculative. I want to own companies that have business and make and sell products. .. not speculative stuff like gold and bitcoin.
I am not making any point. I just pointed out where you made a mistake. Typically, one might just issue a mea culpa.
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gwe67
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Re: How much Gold do you own and why?

Post by gwe67 »

Your money/gold should be invested, working for you, and not sitting on the sidelines. Did the Bucks win the NBA championship with only four players on the court? Get your cash engaged in the game. A very smart man gave you the formula for success. It's easy, and there is no mention of gold:

Three fund portfolio 2020 update
https://www.bogleheads.org/blog/2021/01 ... 20-update/
VTI 48%, VXUS 12%, BND 40%
RadAudit
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Re: How much Gold do you own and why?

Post by RadAudit »

I inherited four or five 1oz. coins from my folks when they passed away. Dad had them because he thought they looked cute.

Hopefully, it'll be enough to bribe the border guard to get out of the country.
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Re: How much Gold do you own and why?

Post by nigel_ht »

halfnine wrote: Fri Jul 30, 2021 4:35 pm
nigel_ht wrote: Fri Jul 30, 2021 10:54 am
"“More than half our clients want to pay in gold,” said one estate agent in Puerto Ordaz, who described a recent nerve-racking drive through the increasingly lawless city to broker a deal, following buyers carrying an apartment’s worth of precious metal.

“The client said ‘come in our car’, but I said: ‘No, we are traveling behind you.’ With the insecurity you don’t know who knows you have gold,” added the agent, who is still struggling with the new norms of doing business, and asked not to be named for her safety.

Even the universities have been swept up in the gold rush. “In November, one of the girls who is studying here told me: ‘A degree is not expensive, because its only 2.5g of gold [for a semester],’” said Arturo Peraza, rector of the city’s influential Universidad Católica Andrés Bello. “It was the first time I learned the value of a university education in grams of gold. I could not have imagined it.”"


https://www.theguardian.com/world/2019/ ... rmed-gangs

Yes, if you have a lot of gold and no guards then gangs will come and take it. If you only have a little bit then it has just replaced cash in the local economy. It's certainly not a good place to be but you can't argue that:

a) Gold doesn't get used when money stops working due to hyperinflation. It is happening in Venezuela.

or

b) Gangs will come steal the small pittance that you have any different then they would have done when money had value and you had cash. If this constantly happened then a gold driven local economy seen Puerto Ordaz wouldn't work.



These aren't grandparent success stories. Many of the Vietnamese refugees (boat people) are my age or younger. While I could be a grandparent by now these stories aren't from some ancient time in the past but experienced by contemporaries.

Are they biased? Around 1.3M left Vietnam. The ones that made it here to the US do represent survivorship bias but the outcome was much better than if they had stayed. About 10% died along the way...although some estimates are as high as 300K. 424K made it to the US.

Is it a good reason to hold gold for US citizens? I guess that depends on a lot of factors. Some economic and some personal.
You have selectively edited my posts,which changes the content.
There is a back link for the full text.
However, you are not going to be trading significant amounts of gold (particularly gold coins) without undue notice and risk.
People are buying condos with it sooo…yes there is risk but it’s happening.
There are plenty of crisis currently happening and that have happened all all over the world in the past 20-30 years. You are welcome to post all the examples where there is/was a gold driven local economy.
Well dollars and euros work too…if holding them isn’t risky because it’s linked to the west. Gold is more awkward but it’s untraceable once melted.

In the case of US citizens needing gold the assumption is that dollars aren’t worth much anymore.
As to Vietnam that happened 45 years ago.
That’s not that long ago really.
As I indicated in my original post (which has again been edited out) the world has changed a lot since then. In the current era one doesn't need gold to migrate as there are plenty of ways for you or I to hold other currencies or foreign assets.
Do you? I don’t. I would guess more folks hold gold than foreign currency or other foreign assets.
Obviously, and as I mentioned in my post, if you are facing extermination then of course you will leave. But, otherwise, you are likely much better off staying where you are. And if it gets to the point where either you or I need gold for any chance of getting out of the country, we already blew it.
Your bolded comment is why most folks “blow it” and don’t leave in time. The assumption that if they keep their heads down maybe things won’t be so bad. That they can hide their past or they aren’t important enough to persecute or hey, they’re on the winning side…but the wrong part of the winning side.

/shrug

If your family has experienced this in the last generation or so then you get it.

If your family hasn’t then you don’t. It can’t happen here or if it does you’ll leave in time or it’s not survivable so no need to prepare. That’s essentially your argument and 99% of the time you’re right.

It’s insanely hard to uproot yourself and go somewhere else where you are severely disadvantaged from not knowing the language, have no family or friends, with little or no assets and whatever education you have worthless. To go from educated white collar elite to working as housekeeping in a hotel.

No, it’s rare for folks, even those with means, to leave in time.

I probably wouldn’t so the tiny bit of gold I hold is my Hail Mary plan.
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Re: How much Gold do you own and why?

Post by BHawks87 »

What's the reason that Central Banks hold so much gold?
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Re: How much Gold do you own and why?

Post by halfnine »

nigel_ht wrote: Fri Jul 30, 2021 8:41 pm It can’t happen here or if it does you’ll leave in time or it’s not survivable so no need to prepare. That’s essentially your argument and 99% of the time you’re right.
That is not my argument at all. My argument is that if you wait until all you have left is gold you waited too long. Holding onto gold (with the intent of it being a hail mary plan) might even make you wait longer.
nigel_ht wrote: Fri Jul 30, 2021 8:41 pm It’s insanely hard to uproot yourself and go somewhere else where you are severely disadvantaged from not knowing the language, have no family or friends, with little or no assets and whatever education you have worthless. To go from educated white collar elite to working as housekeeping in a hotel.
Of course it is. And the longer you wait the more likely you aren't getting in at all.
nigel_ht wrote: Fri Jul 30, 2021 8:41 pmThat’s not that long ago really.
In terms of the ability to migrate...yes, 45 years is a long time ago. Even twenty years ago was a long time ago. Twenty years ago I could migrate to most any country. Today that number is greatly reduced. I know because over the last 20 years I've lived all over the place (and picked up a citizenship or two).
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Re: How much Gold do you own and why?

Post by HanSolo »

BHawks87 wrote: Fri Jul 30, 2021 10:14 pm What's the reason that Central Banks hold so much gold?
Because Bogleheads know things that central bankers don't know...?
gwe67 wrote: Fri Jul 30, 2021 11:06 am
Ocean77 wrote: Fri Jul 30, 2021 10:55 am
gwe67 wrote: Fri Jul 30, 2021 10:49 am This subject has been covered ad nauseum, but here's an example of why gold is such a ripoff. Yeah, I know there are lower prices available, but index funds don't charge purchase fees, storage fees, or selling fees. Cost to own gold for 5 years using this broker = 1.4%. Cost to own VTI for 5 years = 0.15%.
You should compare apples to apples:
1. Compare buying/selling a stock index fund/ETF vs a gold ETF, or
2. Compare buying/selling a business, factory or rental building vs physical gold
1. The SPDR Gold Shares GLD charges 0.40% annually, or 2.00% over five years. Worse buy than physical gold.
2. Rentals are typically an even worse investment than gold, but I've argued that point many times as well.
Since gold was regarded as money for centuries, a better apples-to-apples comparison is: long-term holdings of gold (including ETFs that hold physical) vs. long-term holdings of cash and near-cash (CDs, money markets, T-bills, diversified holdings of high-quality short-term bonds, etc.).

How does gold do in that comparison?
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Re: How much Gold do you own and why?

Post by GoneOnTilt »

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Re: How much Gold do you own and why?

Post by GoneOnTilt »

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Re: How much Gold do you own and why?

Post by seajay »

gwe67 wrote: Fri Jul 30, 2021 5:29 pm Your money/gold should be invested, working for you, and not sitting on the sidelines.
US$ introduction in 1792 and 33% US$ (hard currency), 67% gold yearly rebalanced, would in UK purchase power terms to recent times have lost just 20% (assuming 1792 US$ were still regular dollar bills, i.e. I've not factored in any numismatic value). If those dollars were deposited and earning interest, so more the better.

That was a relatively high start date level however, more broadly 0.6 is around the central line, with 1.0 high, 0.3 low i.e. the purchase power value was volatile. Selective time periods could indicate bad outcome, other time periods great outcome. Over periods of relative decline so stocks tended to do well, and vice versa. A 50/50 barbell of stock/gold combines to a central bullet that exhibited a much smoother real gain progression line.

A factor with bonds is that taxation tends to also rise with yields/inflation. 15% inflation, 15% interest, 33% taxation = -5% real ... type risks. Gold in paying no interest/dividends reduces/negates such risk, taxable only as/when sold.

A three-fund with gold instead of bonds historically yielded better average rewards, but did endure higher volatility. Similar worst cases, better average cases. Rather than either alone, a reasonable choice might be some of both. Asset allocations that included some gold were broadly better than not including gold.
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Re: How much Gold do you own and why?

Post by nigel_ht »

halfnine wrote: Sat Jul 31, 2021 12:13 am In terms of the ability to migrate...yes, 45 years is a long time ago. Even twenty years ago was a long time ago. Twenty years ago I could migrate to most any country. Today that number is greatly reduced. I know because over the last 20 years I've lived all over the place (and picked up a citizenship or two).
With demographic shifts that may change again.

Being a digital nomad was getting easier until covid.

However, this conversation has convinced me to see about reducing my cash holding and perhaps buying some gold in Singapore.
UpperNwGuy
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Re: How much Gold do you own and why?

Post by UpperNwGuy »

Has anyone here bought gold for the first time after reading this thread?
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midareff
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Re: How much Gold do you own and why?

Post by midareff »

halfnine wrote: Fri Jul 30, 2021 4:41 pm
midareff wrote: Fri Jul 30, 2021 4:22 pm
halfnine wrote: Fri Jul 30, 2021 8:46 am
midareff wrote: Fri Jul 30, 2021 7:56 am I remember my immediate post college days when gold was $800 an ounce. Now it's $1800 an ounce. Unfortunately, my immediate post college days were 50 years ago. In 1970 the average closing price of the S&P500 was 83.15, yesterday it closed at 4419.15 you do the math. Gold is what you make jewelry out of because it doesn't corrode on you skin. The S&P is what you buy if you want to own companies that have businesses. I own a couple of ounces of gold, some of it holding really nice looking stones in place.
In 1970 the price of gold was around $38. The math comes out pretty good for that time frame. You should pick better starting dates for your argument.
https://www.macrotrends.net/1333/histor ... year-chart look at a 100 year chart rather than pick arbitrary data point. You are helping to make my point, it's purely speculative. I want to own companies that have business and make and sell products. .. not speculative stuff like gold and bitcoin.
I am not making any point. I just pointed out where you made a mistake. Typically, one might just issue a mea culpa.
OK mea culpa...... chart speaks for itself.
BHawks87
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Re: How much Gold do you own and why?

Post by BHawks87 »

UpperNwGuy wrote: Sat Jul 31, 2021 8:43 am Has anyone here bought gold for the first time after reading this thread?
I do all of my non retirement account purchases at the end of the month and am going to make my first purchase at the end of August. I just read Fail-Safe Investing by Harry Browne and also The Permanent Portfolio by Craig Rowland and feel like at least a small allocation to gold isn't the worst thing in the world. I'm 5 to 10 years out from retirement so have been buying more bonds and keeping more cash around lately and am going to build up some gold holdings as well. I still don't really feel that comfortable with as high as a 25% gold holding but I could see 10% to 15%. I recently read one of "Big Erns" blog posts about sequence of return risks and which allocations seem to protect you best and he concluded that dropping your stock allocation by 10% to 15% and replacing with gold provided a great deal of protection. He is usually someone that bashes everything except 100% stocks so that was surprising to say the least.

I have always been on the skeptical side of gold but I have also been running lots of Monte Carlo simulations and back tests and it is hard to deny that some gold does enhance the portfolio.
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peskypesky
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Re: How much Gold do you own and why?

Post by peskypesky »

retired@50 wrote: Thu Jul 29, 2021 11:46 am This chart from Jeremy Siegel's book "Stocks for the Long Run" sums it up for me.
ETA: To answer the OP's question, I don't own any gold, and the chart below is the reason why.

Image

Regards,
I have never bought any gold, and have had almost all my investments in the S&P 500 index for the past 14 years. I wanted growth, not wealth preservation...because I had no wealth.

But now, I do. And I am concerned about preserving that wealth, especially now that I am in early retirement. I am researching ways to do that, and gold seems to finally be an option for me. So, I am considering rolling over a chunk of my 401k into a self-directed IRA that will allow me to hold gold. I am also starting to invest into "that which cannot be spoken of on Bogleheads", i.e. digital gold.

I am very concerned about the housing bubble in the US. This is what led to the last huge crash in 2007-2008. And even though it makes me smile to see the high value of my stocks, I am also very concerned about the high valuations and the potential for a stock market collapse. And let's not even get into the growing deficit, growing trade deficit, and the printing of money.

I am only 55, and hope to live another 30 years approximately....so I do need to think about wealth preservation. And gold is one thing I'm looking at. The stability of gold, as seen in this graph, is attractive to me.
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peskypesky
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Re: How much Gold do you own and why?

Post by peskypesky »

DarkHelmetII wrote: Thu Jul 29, 2021 12:29 pm Gold is not an investment, it is insurance. Insurance costs money but dampens the financial impact of unexpected shocks. One's risk tolerance and investment time horizon should dictate if any gold allocation is appropriate.
Precisely...and why I am finally interested in it.
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peskypesky
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Re: How much Gold do you own and why?

Post by peskypesky »

Gentlermadness wrote: Thu Jul 29, 2021 12:39 pm I wanted my Emergency fund to be diversified outside of US control. FYI I also diversified into crypto with 3 percent. So EF is 2% cash, 3% crypto, 5% physical gold.

I view it as not part of my portfolio that is going to grow. It is sleep well at night money. My job is very stable and very low likelihood of needed an EF(stable income, no debt, 1 year food, able to bike to work if needed) My expenses if i need to cut back are extremely low.
I'm of the same mindset. I have added 3% of cyypto to my portfolio and will almost surely add some gold. Maybe 10%. I hold very little cash.

I have no debt. Very low living expenses at the moment. And I'm going to be getting about $115k in inheritance from my mother's estate.
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peskypesky
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Re: How much Gold do you own and why?

Post by peskypesky »

"Inflation has supplanted the global pandemic as a primary risk. But the jury is out over whether this inflationary episode materialises, is transient or pervasive.

If it is more than just a short-lived event, an inflation-protected portfolio should include gold for the benefits it brings. Our Qaurum model can offer some guidance on the implied impact of inflation on both demand, supply and price (See Focus 1).

In the long term, gold serves as a strong strategic component in many portfolios, not only for its diversification benefits but also for its returns. The relationship gold is shown to have with money supply demonstrates, perhaps, that the strong returns we have experienced since 1971 are not aberrant. Gold’s ability to protect against more than increases in the general price level suggests that its long-term real returns should be positive – something current long-term portfolios may struggle to achieve."

https://www.gold.org/goldhub/research/b ... tion-hedge
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Re: How much Gold do you own and why?

Post by BogleKev »

gwe67 wrote: Thu Jul 29, 2021 10:59 am
TomatoTomahto wrote: Thu Jul 29, 2021 10:54 am I don’t own physical gold, but I do have a bit of physical silver. I bought it during the most unsure period of early COVID, not as an investment but in case I needed it for swap/barter. It still sits in my safe.
I was without electricity and running water for a week, and nobody was bartering with precious metals. People were desperately seeking gasoline, generators, drinking water, food and firewood. But not metals. Even if the situation had gone on for months, I'm sure that metals would still have been of little trade value.
I agree. Precious metals as an investment, maybe; but as a barter item it'll quickly have no value during a real crisis. Pints of various liquors, cartons/packs of cigarettes, fishing supplies, hand tools, feminine hygiene products; Spend $500 dollars on a mixed stash of all of those and you'll be in good position for bartering.
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Re: How much Gold do you own and why?

Post by reln »

Always passive wrote: Thu Jul 29, 2021 10:33 am I know that gold is a highly controversial investment. There are many opinions, from Buffett's very negative to those that hold 25% following the Permanent Portfolio strategy.
I happen to own a bit less than 5% and wonder if I should not increase it to 10%.
For those that believe in this asset, what is the reason that you believe in it?
I would appreciate your comments!
I believe this asset has a place in some portfolios for it's diversification benefit when it's performed poorly in recent decades and perhaps a short position when it's run up. I hold 0% gold.
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Re: How much Gold do you own and why?

Post by halfnine »

GoneOnTilt wrote: Sat Jul 31, 2021 2:58 pm ...No, it's not. Confirmation bias is one of the most dangerous errors in inquiry one can make, and not just with regard to investing. Worthy of comment, even more than once. This is a discussion forum....
This isn't exactly an open discussion forum. This is forum that revolves around Bogleish type ideals and drifting too far away from those ideals isn't much tolerated. Alternative investment threads often end up locked (typically because they are hijacked by Boglehead diehards). And some discussions (like cryptocurrency) aren't even allowed. If one is truly worried about being trapped in an echo chamber and being subject to confirmation bias this probably isn't the financial forum to frequent.
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Re: How much Gold do you own and why?

Post by gwe67 »

Always passive wrote: Thu Jul 29, 2021 10:45 am
Toons wrote: Thu Jul 29, 2021 10:39 am None
Non producing Asset


:happy
If you do not invest in gold, please do not answer. I am looking for reasons to invest and not why not invest.
I expect that the broad index funds have holdings in gold mining, and perhaps even companies that have some physical stockpile of gold. Gold jewelry could also be considered an investment. Many of us have dental gold. And, "The human body is composed of many elements, including gold in trace amounts." So, probably everyone is allowed to respond.
VTI 48%, VXUS 12%, BND 40%
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Re: How much Gold do you own and why?

Post by halfnine »

nigel_ht wrote: Sat Jul 31, 2021 8:08 am
halfnine wrote: Sat Jul 31, 2021 12:13 am In terms of the ability to migrate...yes, 45 years is a long time ago. Even twenty years ago was a long time ago. Twenty years ago I could migrate to most any country. Today that number is greatly reduced. I know because over the last 20 years I've lived all over the place (and picked up a citizenship or two).
With demographic shifts that may change again.

Being a digital nomad was getting easier until covid.

However, this conversation has convinced me to see about reducing my cash holding and perhaps buying some gold in Singapore.
I am not sure demographics is going to alter the landscape for most of us. The trend in immigration is to bring in the young (under 30) with whatever desirable skills a country is looking for. This nearly always encompasses doctors and nurses but certainly could include various forms of labour that might be in short supply. On the other side of the spectrum countries are also catering to the rich who would be willing to invest large sums of money into the country. Most of us are going to find ourselves somewhere in the middle between these two categories.

I would say that being an expat digital nomad has been easy enough for at least 15 years or so. Although it really didn't take off as a concept until about 10 years ago. Obviously, like you mentioned, Covid has altered that for now.

If you're serious about gold in Singapore there is a place I believe called Silver Bullion. That's all I really know about it, but it could be worth a look. It's been nearly a decade since I have been in Singapore.
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Re: How much Gold do you own and why?

Post by GoneOnTilt »

halfnine wrote: Sat Jul 31, 2021 3:41 pm This isn't exactly an open discussion forum. This is forum that revolves around Bogleish type ideals and drifting too far away from those ideals isn't much tolerated. Alternative investment threads often end up locked (typically because they are hijacked by Boglehead diehards).
Then what about Mr. Bogle's emphatic statement that "Gold is not an investment at all!":

https://www.youtube.com/watch?v=KlhT07G8zGs

By the above stated standard, this thread should be locked!!
halfnine
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Re: How much Gold do you own and why?

Post by halfnine »

GoneOnTilt wrote: Sat Jul 31, 2021 4:05 pm
halfnine wrote: Sat Jul 31, 2021 3:41 pm This isn't exactly an open discussion forum. This is forum that revolves around Bogleish type ideals and drifting too far away from those ideals isn't much tolerated. Alternative investment threads often end up locked (typically because they are hijacked by Boglehead diehards).
Then what about Mr. Bogle's emphatic statement that "Gold is not an investment at all!":

https://www.youtube.com/watch?v=KlhT07G8zGs

By the above stated standard, this thread should be locked!!
If we continue this discussion it likely will be (see above). I prefer for that not to happen so will not comment further. You are free to have the last word if you so desire.
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Re: How much Gold do you own and why?

Post by GoneOnTilt »

halfnine wrote: Sat Jul 31, 2021 4:19 pm
GoneOnTilt wrote: Sat Jul 31, 2021 4:05 pm
halfnine wrote: Sat Jul 31, 2021 3:41 pm This isn't exactly an open discussion forum. This is forum that revolves around Bogleish type ideals and drifting too far away from those ideals isn't much tolerated. Alternative investment threads often end up locked (typically because they are hijacked by Boglehead diehards).
Then what about Mr. Bogle's emphatic statement that "Gold is not an investment at all!":

https://www.youtube.com/watch?v=KlhT07G8zGs

By the above stated standard, this thread should be locked!!
If we continue this discussion it likely will be (see above). I prefer for that not to happen so will not comment further. You are free to have the last word if you so desire.
My last word is that I completely agree with what you stated above. You're right and I misspoke. This isn't exactly an open forum. On balance that probably helps keep things in line quite often, but can be frustrating at times.

Have a great evening and thanks for clarifying. :sharebeer
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Re: How much Gold do you own and why?

Post by nigel_ht »

GoneOnTilt wrote: Sat Jul 31, 2021 4:05 pm
halfnine wrote: Sat Jul 31, 2021 3:41 pm This isn't exactly an open discussion forum. This is forum that revolves around Bogleish type ideals and drifting too far away from those ideals isn't much tolerated. Alternative investment threads often end up locked (typically because they are hijacked by Boglehead diehards).
Then what about Mr. Bogle's emphatic statement that "Gold is not an investment at all!":

https://www.youtube.com/watch?v=KlhT07G8zGs

By the above stated standard, this thread should be locked!!
“1-3-5% in gold isn’t the worst idea in the world”

He’s right though…it’s not an investment but rather than speculation I would call it insurance.
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Re: How much Gold do you own and why?

Post by nigel_ht »

halfnine wrote: Sat Jul 31, 2021 4:03 pm
nigel_ht wrote: Sat Jul 31, 2021 8:08 am
halfnine wrote: Sat Jul 31, 2021 12:13 am In terms of the ability to migrate...yes, 45 years is a long time ago. Even twenty years ago was a long time ago. Twenty years ago I could migrate to most any country. Today that number is greatly reduced. I know because over the last 20 years I've lived all over the place (and picked up a citizenship or two).
With demographic shifts that may change again.

Being a digital nomad was getting easier until covid.

However, this conversation has convinced me to see about reducing my cash holding and perhaps buying some gold in Singapore.
I am not sure demographics is going to alter the landscape for most of us. The trend in immigration is to bring in the young (under 30) with whatever desirable skills a country is looking for. This nearly always encompasses doctors and nurses but certainly could include various forms of labour that might be in short supply. On the other side of the spectrum countries are also catering to the rich who would be willing to invest large sums of money into the country. Most of us are going to find ourselves somewhere in the middle between these two categories.

I would say that being an expat digital nomad has been easy enough for at least 15 years or so. Although it really didn't take off as a concept until about 10 years ago. Obviously, like you mentioned, Covid has altered that for now.

If you're serious about gold in Singapore there is a place I believe called Silver Bullion. That's all I really know about it, but it could be worth a look. It's been nearly a decade since I have been in Singapore.
Yah, I’m looking at silver bullion. BullionStar is famous but seems a little sketch…
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Re: How much Gold do you own and why?

Post by Dregob »

Always passive wrote: Thu Jul 29, 2021 10:33 am I know that gold is a highly controversial investment. There are many opinions, from Buffett's very negative to those that hold 25% following the Permanent Portfolio strategy.
I happen to own a bit less than 5% and wonder if I should not increase it to 10%.
For those that believe in this asset, what is the reason that you believe in it?
I would appreciate your comments!
Do gold crowns count?
Two in my head and one that had to be replaced in the drawer.
BHawks87
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Re: How much Gold do you own and why?

Post by BHawks87 »

Dregob wrote: Sat Jul 31, 2021 5:10 pm
Always passive wrote: Thu Jul 29, 2021 10:33 am I know that gold is a highly controversial investment. There are many opinions, from Buffett's very negative to those that hold 25% following the Permanent Portfolio strategy.
I happen to own a bit less than 5% and wonder if I should not increase it to 10%.
For those that believe in this asset, what is the reason that you believe in it?
I would appreciate your comments!
Do gold crowns count?
Two in my head and one that had to be replaced in the drawer.
I would say that's a poor way to diversify. If there is a societal collapse you will have to pull your own teeth to barter for food that you will be unable to eat. :oops:
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Re: How much Gold do you own and why?

Post by RadAudit »

Dregob wrote: Sat Jul 31, 2021 5:10 pm Do gold crowns count?
Two in my head and one that had to be replaced in the drawer.
When you start looking at gold crowns as a part of the portfolio, things are getting really serious
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
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HanSolo
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Re: How much Gold do you own and why?

Post by HanSolo »

GoneOnTilt wrote: Sat Jul 31, 2021 2:58 pm
HanSolo wrote: Sat Jul 31, 2021 3:26 am
GoneOnTilt wrote: Sat Jul 31, 2021 3:01 am con·fir·ma·tion bi·as
noun
the tendency to interpret new evidence as confirmation of one's existing beliefs or theories.


I'm not being argumentative, just providing food for thought. We all tend to do it.
No, that's argumentative.
No, it's not.
Yes. It is.

But if you say it isn't arguing, cool. Then I'm not arguing either!
Confirmation bias is one of the most dangerous errors in inquiry one can make, and not just with regard to investing. Worthy of comment, even more than once.
You're making the assumption that confirmation bias is in evidence without proving it. More specifically, you conveniently omitted the part of my post that said "there's nothing wrong with...." You didn't explain what part of that sentence you disagreed with. That's where your argument, oops, I mean position, falls flat.
This is a discussion forum. We're not prohibited from bringing up a topic just because another poster already did. That's ridiculous.
I didn't say anything should be prohibited. I was just pointing out where some commentary was off-topic and/or fallacious. Since you're in favor of open discussion, I'll assume you're OK with that.
To answer your question above. Gold is a lousy hedge against inflation, compared to cash, particularly in the short- to medium-term. This is from memory, but in the period from 1980 to 2000, you lost 80% of your value if you invested in gold when accounting for inflation.
The above is not an answer to my question, as I specifically posed the question around long-term holdings, not short- or medium-term as you cited. Second, cherry-picking the high (1980) and the low (2000) is disingenuous. I could do the same for stocks and come up with all kinds of fallacious conclusions.
Too volatile.
Then you might not want to be in stocks either, or long-term bonds for that matter.

There are reasons not to invest in the Harry Browne Permanent Portfolio, and volatility isn't one of them.
Over the past century cash has kept up with and slightly beat inflation.
No. The above is a false statement. Look at the chart that was posted several times upthread (see the line labeled "US Dollar").

[OT comment removed by admin LadyGeek]
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Da5id
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Re: How much Gold do you own and why?

Post by Da5id »

HanSolo wrote: Sat Jul 31, 2021 7:18 pm
GoneOnTilt wrote: Sat Jul 31, 2021 2:58 pm
Over the past century cash has kept up with and slightly beat inflation.
No. The above is a false statement. Look at the chart that was posted several times upthread (see the line labeled "US Dollar").
I suspect he was using "cash" in the sense Portfolio Visualizer or most investors use it. Not US Dollars stuffed into the mattress, but instead very short term treasuries (or money markets or such).

Gold did indeed do better starting from 1972 (oldest PV data set) and in most starting years since it seems. But "Cash" did beat inflation over that period. https://www.portfoliovisualizer.com/bac ... ion3_3=100

Gold has been quite volatile. Returns were a bit better than intermediate term treasuries starting in 1972 (they don't have TBM data for that far back). I don't find a place for it in my simple portfolio, but understand people want a some of it for their own reasons.
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HanSolo
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Re: How much Gold do you own and why?

Post by HanSolo »

GoneOnTilt wrote: Sat Jul 31, 2021 7:48 pm I think the issue we're having is that you might just believe something is false simply because you claim it is. I think we've got it figured out!!
No. I just looked at the chart upthread.
Now, you shall learn, and I shall teach you:
Oh Great Master... when will you answer the question I actually asked?
Many others here have also shown how cash has kept up with inflation over the long term. This is well known and widely available information. I think the only one arguing about it is you.
Well, if you want credit for being all-wise and all-knowing, that's fine.

I was just looking at the chart upthread.
Da5id wrote: Sat Jul 31, 2021 7:50 pm I suspect he was using "cash" in the sense Portfolio Visualizer or most investors use it. Not US Dollars stuffed into the mattress, but instead very short term treasuries (or money markets or such).
It sounds like you're saying that "most investors" would look at the chart posted upthread and say "cash" refers to the T-Bills line, not the USD line. I get that this is your opinion.

In any case, I posed a question upthread ("How does gold do in that comparison?")... interesting that nobody can directly address it.
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