3 ms·

I use to scoff at gold investors, I was one of those 'only the sp500 is the right asset class, it always beats every other asset class over the long run' type p

I use to scoff at gold investors, I was one of those 'only the sp500 is the right asset class, it always beats every other asset class over the long run' type people. then in 2019, I saw a chart of asset prices over the last 20 years. Gold, oil, and real-estate out performed the sp500 over that 20 year period (to me, a reasonable 'long period of time'). its actually still true today in 2020, probably will remain so for a long time. gold aug-2000:aug-2020 = 409:2000 or 4.89x sp500 aug-2000:aug-2020 = 1471:3327 or 2.26x that is serious under performance over a 20 year period, which has been true for ever a year now. not true with oil anymore though.

prepend 6y ago
Compare that to all the other 20 year windows. So unless you think this 20 year period is useful for predicting the next 20 year window, it’s not very helpful. Gold really sucks over long term investing windows (eg 30-50 years) although it, like pretty much everything, will have specific windows of outperforming the s&p.
- autokad 6y ago
  > "Compare that to all the other 20 year windows. So unless you think this 20 year period is useful for predicting the next 20 year window, it’s not very helpful." No window is good at predicting any asset. As in, previous returns can't be used to predict anything. Nobody cares about 50 year windows if that is well outside of their investment window. realistically, a person has about 20 years to build up assets before they need to switch to more safer bonds so talking about 50 year windows is like me saying I want to live in this geography for nice weather and you saying 'well over geological epochs, this place is far more stable'. I think the sp500 should be most people's primary investment. but I also hate people who say the sp500 is infallible, when they used research that only looked at 1952 - 1999. so when you see people parrot 'the sp500 beats all asset classes over any long period of time'. well 20 years is a long period of time.
  - prepend 6y ago
    I’ve never met anyone who says s&p is infallible, it’s usually that it is better than any alternative. I want a 50 year horizon for intergenerational wealth. For myself, I started at 20 and probably wont retire until 65-75. Although it won’t all be in s&p at 75, some of it will. The 20 year window is useful for retirement, but the fact that one 20 year window in the past 100 years out performed isn’t that handy as the s&p usually outperforms gold.
jcheng 6y ago
For stocks[1], August 2000 is just about the high water mark of the dot-com bubble; for gold[2], August 2000 is the bottom of a "V" that extends 20 years in either direction. I'm not saying you cherry-picked August 2000 as a starting point to make gold look good (20 years is a nice round number and a reasonable time span), but if you were cherry-picking you couldn't do better than that. [1] https://www.google.com/search?q=sp500+historical&oq=sp500+historical&aqs=chrome..69i57j0l7.1975j1j7&sourceid=chrome&ie=UTF-8 https://www.google.com/search?q=sp500+historical&oq=sp500+hi... [2] https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart https://www.macrotrends.net/1333/historical-gold-prices-100-...
- autokad 6y ago
  That's true, but stocks are also at all time highs now, so its not a completely unfavorable position for stocks. This is the reason why I said it will likely out perform over that window for a few years. The problem is, someone who is working and saving money away doesnt get to choose the window they are in. I wouldn't buy gold here, but if gold ever drops around the range of 1500, I am not going to miss that chance again at having some of it in my portfolio.
refurb 6y ago
Your dates are deceiving you. Aug 2000 was the near bottom for gold and the near .top for the sp500. If you bought gold in 1980 (the peak) you’d still be underwater even with the current jump in price.

prepend 6y ago

Compare that to all the other 20 year windows. So unless you think this 20 year period is useful for predicting the next 20 year window, it’s not very helpful. Gold really sucks over long term investing windows (eg 30-50 years) although it, like pretty much everything, will have specific windows of outperforming the s&p.

autokad 6y ago
> "Compare that to all the other 20 year windows. So unless you think this 20 year period is useful for predicting the next 20 year window, it’s not very helpful." No window is good at predicting any asset. As in, previous returns can't be used to predict anything. Nobody cares about 50 year windows if that is well outside of their investment window. realistically, a person has about 20 years to build up assets before they need to switch to more safer bonds so talking about 50 year windows is like me saying I want to live in this geography for nice weather and you saying 'well over geological epochs, this place is far more stable'. I think the sp500 should be most people's primary investment. but I also hate people who say the sp500 is infallible, when they used research that only looked at 1952 - 1999. so when you see people parrot 'the sp500 beats all asset classes over any long period of time'. well 20 years is a long period of time.
- prepend 6y ago
  I’ve never met anyone who says s&p is infallible, it’s usually that it is better than any alternative. I want a 50 year horizon for intergenerational wealth. For myself, I started at 20 and probably wont retire until 65-75. Although it won’t all be in s&p at 75, some of it will. The 20 year window is useful for retirement, but the fact that one 20 year window in the past 100 years out performed isn’t that handy as the s&p usually outperforms gold.

jcheng 6y ago

For stocks[1], August 2000 is just about the high water mark of the dot-com bubble; for gold[2], August 2000 is the bottom of a "V" that extends 20 years in either direction. I'm not saying you cherry-picked August 2000 as a starting point to make gold look good (20 years is a nice round number and a reasonable time span), but if you were cherry-picking you couldn't do better than that. [1] https://www.google.com/search?q=sp500+historical&oq=sp500+historical&aqs=chrome..69i57j0l7.1975j1j7&sourceid=chrome&ie=UTF-8 https://www.google.com/search?q=sp500+historical&oq=sp500+hi... [2] https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart https://www.macrotrends.net/1333/historical-gold-prices-100-...

autokad 6y ago
That's true, but stocks are also at all time highs now, so its not a completely unfavorable position for stocks. This is the reason why I said it will likely out perform over that window for a few years. The problem is, someone who is working and saving money away doesnt get to choose the window they are in. I wouldn't buy gold here, but if gold ever drops around the range of 1500, I am not going to miss that chance again at having some of it in my portfolio.

refurb 6y ago

Your dates are deceiving you. Aug 2000 was the near bottom for gold and the near .top for the sp500. If you bought gold in 1980 (the peak) you’d still be underwater even with the current jump in price.