4 ms·

Forty years is actually a decent timeframe in terms of capturing the market's cyclical nature. Do you have investing experience?

cylinder 10y ago
Not for the larger cycle IMO. Last forty years almost perfectly covers the working (productive and consumptive) lives of the baby boomers and all that went with that. It also is the first and only 40 year period after Bretton Woods, so we can't conclude much about how gold will behave in the next forty year period. And then there's the very unique 8 years and counting of ZIRP and QE which affects Treasuries. Not just ZIRP but rates generally have declined immensely since the 70s, 80s and 90s overall which favors Treasures as well as the rest of the portfolio. I'm not sure US small caps will be as competitive going forward either -- are we getting the high growth companies on the stock exchange as small caps anymore? Maybe they're all being bought by large caps, staying private until they're large caps themselves, or just not competitive in a US economy that seems to be dominated by large multinationals with all sorts of advantages. There was also a tremendous amount of deficit spending throughout this period which has contributed much of the growth and it's arguable whether that can continue in kind. Also, maybe I missed this but I didn't see any mention of dividends in that post. Is the 11% CAGR including dividends paid out and reinvested? Unfortunately due to the lack of floating gold price before this 40-year period (conveniently) we can't compare to the prior forty years before that. I don't want to be too critical; it's interesting. I do believe small caps are better for a young person to invest in as they have higher risk tolerance, but I'm concerned about the quality of small caps we're seeing on US public markets these days.

4 ms·

Forty years is actually a decent timeframe in terms of capturing the market's cyclical nature. Do you have investing experience?

by nodesocket 10y ago

cylinder 10y ago
Not for the larger cycle IMO. Last forty years almost perfectly covers the working (productive and consumptive) lives of the baby boomers and all that went with that. It also is the first and only 40 year period after Bretton Woods, so we can't conclude much about how gold will behave in the next forty year period. And then there's the very unique 8 years and counting of ZIRP and QE which affects Treasuries. Not just ZIRP but rates generally have declined immensely since the 70s, 80s and 90s overall which favors Treasures as well as the rest of the portfolio. I'm not sure US small caps will be as competitive going forward either -- are we getting the high growth companies on the stock exchange as small caps anymore? Maybe they're all being bought by large caps, staying private until they're large caps themselves, or just not competitive in a US economy that seems to be dominated by large multinationals with all sorts of advantages. There was also a tremendous amount of deficit spending throughout this period which has contributed much of the growth and it's arguable whether that can continue in kind. Also, maybe I missed this but I didn't see any mention of dividends in that post. Is the 11% CAGR including dividends paid out and reinvested? Unfortunately due to the lack of floating gold price before this 40-year period (conveniently) we can't compare to the prior forty years before that. I don't want to be too critical; it's interesting. I do believe small caps are better for a young person to invest in as they have higher risk tolerance, but I'm concerned about the quality of small caps we're seeing on US public markets these days.