And pray tell, how did gold do vs DBC (or rather its underlying index since DBC didn't exist that far back) all the way back to, say, 1985? The two were virtually identical; DBC would've provided a CAGR of 4.68% from 1-1-85 to 12 PM on 12-14-21 while over the same period gold would've provided a CAGR of just a hair over 4.57% (FWIW an annually rebalanced portfolio of 50/50 in both would've done significantly better than either and would've given a CAGR of just shy of 5.39% with a lower standard deviation of returns than either asset alone).buddtholomew wrote: ↑Tue Dec 14, 2021 8:34 amYour peace of mind is a false sense of security and built on quicksand. There is nothing special at all about the PP and it has proven once more this year that Gold is a useless diversifier. Anything tied to inflation (eg DBC) is beating the pants off the metal. Nobody cares about gold anymore and it shows.Cortopassi wrote: ↑Tue Dec 14, 2021 8:27 amBut it is. Peace of mind. I don't have to have the top % return in investing.
Before you say, yeah, but that's years ago....how has gold done vs DBC recently? Well, in 2021, not so hot....it lost 5.3% while DBC was up 37.62%. On the other hand, from 1-1-2006 to 12-31-2020 gold's returns absolutely KILLED the returns on DBC; as of today gold would've turned a thousand dollars invested on January 1st 2006 into $3518; DBC would've turned that same $1K into all of <<checks notes>> $540. DBC especially did badly vs gold during 2008 which if there was ever a year where diversification was called for when anything stock-related was getting pummeled....2008 was it
If you wouldn't write DBC off for that (and you shouldn't....the period from the mid to late 2000s to 2020 was by a large a period of low inflation where unexpected inflation repeatedly failed to materialize...exactly the sort of environment where DBC wouldn't shine and wouldn't be expected to come to the rescue of a portfolio; you don't hate on an asset class for not doing well in exactly the kind of environment it was never expected to do well in and where it wouldn't NEED to shine and do well in because in that kind of environment both stocks and bonds would be providing decent real returns--which is exactly what happened in this period--with the exception of 2008 when stocks sucked; DBC would instead be expected to shine in a period of moderate to high growth with high and/or accelerating inflation which was exactly what we've had in 2021) for its performance from, say, 2006 or 2008 to 2020 then why would you write gold off for having one (slightly and mildly) lousy year?