4 ms·

Gold is not in price discovery because its been around for so long and already had its ETF moment (which is why its stagnated since that massive run). But gold

Gold is not in price discovery because its been around for so long and already had its ETF moment (which is why its stagnated since that massive run). But gold has always performed cyclically. Long term (very long term) its done quite well. Not my cup of tea but it had its place. Going forward I expect btc will disrupt it and flip its value (JPM making the same call).

ori_b 6y ago
Over the last 100 years, you'd have done significantly better by putting your money into an index fund -- and had less volatility. As far as I can tell, gold is just a lousy place to keep your money. What kind of long term are you talking about?
- TuringNYC 6y ago
  I agree with you in theory. However, over the course of 100yrs you also need to worry about entire countries disappearing. If your index fund is denominated in the wrong currency, held by the wrong custodian, or has too many companies based in falling countries, you might be in trouble. Meanwhile, Gold has survived a thousand generations. In a hundred years, there can be wars, reparations, and lots of damage to equity. I think some distinction should be made on store of value (win for gold) vs asset appreciation (win for stocks), especially once you start talking about 100years.
  - deleted 6y ago
    [deleted]
  - lupire 6y ago
    When your country collapses, you tend to find practical matters that make gold a poor store of value, unless you dissolve your gold bars in acid when the war starts.
- Consultant32452 6y ago
  My impression is gold is largely seen as a low risk inflation hedge rather than a growth investment. A better comparison would be a savings account or maybe municipal bonds.
- the_giraffe 6y ago
  Did index funds exist 100 years ago? I'm pretty sure passive investing is a more recent phenomenon.
  - deleted 6y ago
    [deleted]
  - imtringued 6y ago
    >In 1926, it developed a 90-stock index, computed daily. https://en.wikipedia.org/wiki/S%26P_500#History https://en.wikipedia.org/wiki/S%26P_500#History This is just a technicality however. In practice you have to buy stocks according to the index yourself or invest into a fund that mirrors the index for you. The secret sauce in ETFs is that algorithms do the work of the fund manager and thus reduce costs.
anonu 6y ago
Price discovery happens constantly and continuously. It's supply and demand.

ori_b 6y ago

Over the last 100 years, you'd have done significantly better by putting your money into an index fund -- and had less volatility. As far as I can tell, gold is just a lousy place to keep your money. What kind of long term are you talking about?

TuringNYC 6y ago
I agree with you in theory. However, over the course of 100yrs you also need to worry about entire countries disappearing. If your index fund is denominated in the wrong currency, held by the wrong custodian, or has too many companies based in falling countries, you might be in trouble. Meanwhile, Gold has survived a thousand generations. In a hundred years, there can be wars, reparations, and lots of damage to equity. I think some distinction should be made on store of value (win for gold) vs asset appreciation (win for stocks), especially once you start talking about 100years.
- deleted 6y ago
  [deleted]
- lupire 6y ago
  When your country collapses, you tend to find practical matters that make gold a poor store of value, unless you dissolve your gold bars in acid when the war starts.
Consultant32452 6y ago
My impression is gold is largely seen as a low risk inflation hedge rather than a growth investment. A better comparison would be a savings account or maybe municipal bonds.
the_giraffe 6y ago
Did index funds exist 100 years ago? I'm pretty sure passive investing is a more recent phenomenon.
- deleted 6y ago
  [deleted]
- imtringued 6y ago
  >In 1926, it developed a 90-stock index, computed daily. https://en.wikipedia.org/wiki/S%26P_500#History https://en.wikipedia.org/wiki/S%26P_500#History This is just a technicality however. In practice you have to buy stocks according to the index yourself or invest into a fund that mirrors the index for you. The secret sauce in ETFs is that algorithms do the work of the fund manager and thus reduce costs.

anonu 6y ago

Price discovery happens constantly and continuously. It's supply and demand.