- Nov 12, 2017
- 1,602
- 3,947
I guess the question you have to ask yourself is if you are alright with longer, slower down cycles. Using the last10 years as a time range could be sorta skewed as we have been in a record breaking bull cycle in the SM....what kind of cycles do you predict for the rest of your timeline? or until you cash out your Roth? Remember gold reached it's all time highs in 2011 and recaptured that in 2020 DESPITE coming out of a 15 year period of moderate to no inflation and an equity/bond bull markets which are normally adverse to increases in golds price....Should we expect those patterns to hold?
Another factor to keep in mind also is that gold is getting harder and harder to mine(we've found the easy stuff) and more and more regulations will increase the mining and production cost, or perhaps it causes people to lose interest and causes downward pressure on golds price?
Conversely if governments around the world continue to put pressure on crypto what do you think happens to the price of gold? Look back at both charts for the last 2 weeks to see something interesting. BTC jumped what about 8-10K while gold took a major nose dive...My theory is traders may have sold off some gold and put it in BC which just broke a support level? Could gold become what bonds are to stocks, flight to safety from BTC during downturns ?
Like I said before I don't believe in putting a huge amount into precious metals because they don't produce income like RE, or bonds(used to anyway)or value stock, but I also think they are worth a long term speculative stash of maybe 3-5% of my total wealth. Worst
case scenario is it sits around doing nothing almost like a art piece or collector car to be sold off if you really need the cash...best case scenario is it sits for a long time and does what it has done over the last 50 years which is to far out pace the US dollar in value.
Again if you want to make quick money off precious metals stick to selling paper shares and mining stocks.
Great post. I totally get that looking at 10 year return is not representative necessarily of a bigger picture, but just wanted to demonstrate that returns can be changed depending on whaterver point in time you chose in the past.
I am also interested in the relationship between bitcoin and gold. There is definitely a shift happening towards bitcoin and people are actually starting to believe the whole "store of value" narrative.
I agree Gold sounds like a great hedge, not against inflation, but against crypto.