Gyroscopic Investing

Posted: **Mon Jul 18, 2022 10:51 pm**

I hate gold but still haven't found anything to replace it.

I would love to be able to just swap it for something like a total international fund but it just doesn't perform the same historically.

Posted: **Tue Jul 19, 2022 5:31 am**

Kbg wrote: ↑Mon Jul 18, 2022 5:17 pm Not quite MJ.

Per PV...

As a general rule on several average rolling year computations equities outperform gold 1.5 to 2x in CAGR (gold lovers...this should get your attention)

For the last 3 years rolling equites/gold 9.52/8.54%

For the last 5 years rolling equities/gold 10.48/7.31%

You're correct about the rolling numbers for the respective investments, but there is a diversification benefit to holding a mix of gold and stocks that can't be ignored. PV links below for both 3 and 5 year holding periods. For 3 years a 50/50 mix actually beats 100% equities in this particular backtest.

https://www.portfoliovisualizer.com/bac ... tion2_3=50
https://www.portfoliovisualizer.com/bac ... tion2_3=50

I should also note that I hate gold....

Posted: **Tue Jul 19, 2022 12:40 pm**

Hansel wrote: ↑Fri Jul 15, 2022 7:52 am "If you consider the possible outcome of our Government failing to handle inflation, the gold prices will also skyrocket. I know that gold was always a reliable source of investment, but it gives a little reward for your investment price.

This seems like an AI-generated response, but I'll respond!

I think we're at 1975 on this chart:

: historical-gold-prices-100-year-chart-2022-07-17-macrotrends.png (156.42 KiB) Viewed 6032 times

investopedia wrote:The Great Inflation was blamed on oil prices, currency speculators, greedy businessmen, and avaricious union leaders. However, it is clear that monetary policies that financed massive budget deficits and were supported by political leaders were the cause.

Sound familiar? It lasted a decade while the powers that be tinkered at the periphery, e.g. removing food and energy from the CPI. Are we to believe that the current leaders will do any better?

The Chips Act authorizes about $52 billion in grants and loans for chip manufacturers, as well as a new, four-year 25% investment tax credit for chip making.

Wait, weren't they supposed to be containing inflation?

One major difference between then and now is that there were stronger currencies than the dollar back then, e.g. the swiss franc.

https://www.investopedia.com/articles/e ... lation.asp

Posted: **Tue Jul 19, 2022 6:43 pm**

dockinGA wrote: ↑Tue Jul 19, 2022 5:31 am
Kbg wrote: ↑Mon Jul 18, 2022 5:17 pm Not quite MJ.

Per PV...

As a general rule on several average rolling year computations equities outperform gold 1.5 to 2x in CAGR (gold lovers...this should get your attention)

For the last 3 years rolling equites/gold 9.52/8.54%

For the last 5 years rolling equities/gold 10.48/7.31%
You're correct about the rolling numbers for the respective investments, but there is a diversification benefit to holding a mix of gold and stocks that can't be ignored. PV links below for both 3 and 5 year holding periods. For 3 years a 50/50 mix actually beats 100% equities in this particular backtest.

https://www.portfoliovisualizer.com/bac ... tion2_3=50
https://www.portfoliovisualizer.com/bac ... tion2_3=50

I should also note that I hate gold....

Yes there is, but I've come around to the opinion gold is just like options or other hedges in that you get protection for a net cost. What one does is not right or wrong, just a risk preference and an option for hedging (one among many).

I can say this board has completely de-emotionalized me on gold as it caused me to study it quite in-depth and now I just think of it as an asset class with its own characteristics.

Posted: **Fri Jul 22, 2022 8:52 am**

Jack Jones wrote: ↑Tue Jul 19, 2022 12:40 pm I think we're at 1975 on this chart:

Here we go!

: Screen Shot 2022-07-22 at 9.50.57 AM.png (103.06 KiB) Viewed 5902 times

Who's on board?

2022 is the year of gold.

Posted: **Fri Jul 22, 2022 9:11 am**

Posted: **Fri Jul 22, 2022 2:15 pm**

Trying to keep the faith, Desert

Posted: **Thu Jul 28, 2022 11:28 am**

mathjak107 wrote: ↑Fri Jul 15, 2022 8:55 am Gold is a competitor to the dollar and also bonds , not equites

A new retiree initially loading 50/50 stock/gold, non-rebalanced, spending gold first - as though cash/T-Bills, historically tended to see that gold last relatively few years, 7 or so (4% SWR), as per 1980 start date, or many years, 22 or so as per 1972, or more often somewhere between (12 years).

50/50 transitions to 100/0, averages 75/25, and where stock total return accumulation during the years gold was being spent tends to counter-balance the portfolio. If gold only lasted 7 years (did poorly) so stocks stocks did very well; If gold lasted many years, then stocks again did OK.

On average, with gold lasting 12 years, so stocks typically gained 6% real, saw the 50 stock value double to 100, whilst the 50 gold value was spent, such that after 4% SWR you ended 12 years later still with around the same inflation adjusted start date portfolio value available.

Unlike T-Bills that tend to inflation protect only the amount invested into T-Bills, gold had tended to have a multi-year counter cycle to stocks.

Posted: **Tue May 06, 2025 8:33 am**

Gold has doubled since this first post of this thread.

Posted: **Tue May 06, 2025 1:17 pm**

Amazing

Posted: **Tue May 06, 2025 4:58 pm**

ochotona wrote: ↑Tue May 06, 2025 8:33 am Gold The Dollar has doubled halved since the first post of this thread.

Posted: **Tue May 06, 2025 6:03 pm**

seajay wrote: ↑Tue May 06, 2025 4:58 pm
ochotona wrote: ↑Tue May 06, 2025 8:33 am Gold The Dollar has doubled halved since the first post of this thread.

The dollar is not an investment.

Posted: **Tue May 06, 2025 6:17 pm**

Gold is so, so nice.

Posted: **Fri May 09, 2025 3:33 pm**

dualstow wrote: ↑Tue May 06, 2025 6:03 pm
seajay wrote: ↑Tue May 06, 2025 4:58 pm
ochotona wrote: ↑Tue May 06, 2025 8:33 am Gold The Dollar has doubled halved since the first post of this thread.

The dollar is not an investment.

trillions of dollars are traded in currency markets daily . it’s as much an investment as as gold is since gold is the dollars competitor .

The average daily trading volume in the forex market is a massive $6.6 trillion, with the US dollar being the most traded currency. This is significantly larger than the daily trading volume of stocks on exchanges like Nasdaq and NYSE.

Posted: **Fri May 09, 2025 3:47 pm**

They’re clearly both investments, no matter what anyone argues.

Posted: **Sat May 10, 2025 7:02 pm**

mathjak107 wrote: ↑Fri May 09, 2025 3:33 pm
dualstow wrote: ↑Tue May 06, 2025 6:03 pm
seajay wrote: ↑Tue May 06, 2025 4:58 pm
ochotona wrote: ↑Tue May 06, 2025 8:33 am Gold The Dollar has doubled halved since the first post of this thread.

The dollar is not an investment.
trillions of dollars are traded in currency markets daily . it’s as much an investment as as gold is since gold is the dollars competitor .

The average daily trading volume in the forex market is a massive $6.6 trillion, with the US dollar being the most traded currency. This is significantly larger than the daily trading volume of stocks on exchanges like Nasdaq and NYSE.

Pass the parcel bomb gameplay? Increasingly fewer want to be holding USD as gawd knows what Trump will do tomorrow or how quickly he'll change his mind about yesterdays agreements/choices

Posted: **Wed May 14, 2025 10:53 am**

Is this a correct statement?

"Gold has done as well or better than the S&P 500 for last 10- and 20-year period."

Posted: **Wed May 14, 2025 11:00 am**

last time i checked it was true .

but gold certainly beat bonds the last 20 years over almost all time frames .

you have to really cherry pick to find exceptions

Posted: **Wed May 14, 2025 11:06 pm**

Its over for bonds. The culture has changed and no one cares if the Fed just prints. Leftists will blame Trump. If the Fed funds gov by buying short duration, rather than buying long from the market, Im cooked.

https://old.reddit.com/r/AskEconomics/c ... ey_have_a/

edit1 for substance. duno if true: "it becomes hard for the government to pay interest at 5.3% or higher rates because that’s highest tax recipient level minus the lowest spending (both as a percent of GDP). Aka best case scenario the govt is maxing out taxes and minimizing spending.
“ 20.4 - 15.1 = 5.3%. This represents the maximum surplus we could generate, if we raise taxes to the highest level on record and cut spending to the lowest level on record.”

Posted: **Thu May 15, 2025 3:11 pm**

https://www.morningstar.com/portfolios/ ... m_id=32623

How to Use Gold in Your Portfolio

What you need to know about the advantages and risks of investing in gold.

Posted: **Fri May 16, 2025 8:04 am**

what you have to remember with all these gold funds is expenses are only part of the story . spreads between bid and ask can matter a lot .

some of the lowest expense funds in the article barely edged out gld with its .40 expense .

i found most of the time for my large trades in gold gld actually does better because of lower spreads .

same thing with spy vs voo . spy tends to have much smaller spreads which erase expense differences

Posted: **Fri May 16, 2025 2:12 pm**

boglerdude wrote: ↑Wed May 14, 2025 11:06 pm Its over for bonds. The culture has changed and no one cares if the Fed just prints.

When others held US Treasury's (China etc.) then the Fed could print/spend on say military might and others (China) had to print and buy more US Treasury's to avoid otherwise having their existing holdings devalued. Simply - the US could export inflation, have others pay for its largess and above average standards of living.

Others are now dumping dollars for other assets

https://www.thebanker.com/content/c5f0a ... 638a1e6272

so the US is inclined to turn Japanese, have the Fed print/buy as much bonds as the Treasury want to sell (borrow). The loss of being able to export inflation is a major factor, makes Americans on the hook for US spending, and where US debt including unfunded debt is of the order of $1 million per American taxpayer and rising.

Trumps threats to tariff those that do de-dolarize will just see reciprocation and more likely drive large US corporate's with global earnings to re-domicile outside of the US.

The US $1.2Tn/year trade deficit also has to be eliminated, turned around totally into a trade surplus, but how might that be grown when the US is increasingly being seen as a pariah state, promises made today broken tomorrow, don't discuss things with Trump when foreign leaders visit the White House - just play the game of pandering to child like Trump to avoid him having a tantrum.

Here's a recent 'Presidential' comment made by Trump about Bruce Springsteen as a example

“Never liked him, never liked his music, or his Radical Left Politics and, importantly, he’s not a talented guy — Just a pushy, obnoxious JERK, who fervently supported Crooked Joe Biden, a mentally incompetent FOOL

Gyroscopic Investing

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