I started watching belangp’s videos a couple weeks ago when I was on vacation. It’s great stuff! He has a video titled “Sleep Easy Portfolio” (https://youtu.be/K70aQh9ptpU) that caught my attention – he shows how adding gold to a stock and/or bond portfolio reduces risk without sacrificing returns (from 1970-2015). I simulated a balanced stock/bond/gold 401(K) from 1987-2018 and found that gold caused the portfolio to underperform…because I missed the 1979-1981 bull market in precious metals. I’m not ready to start filling a vault with gold, but it’s on my radar. A metals rally puts any stock rally to shame, so if gold spikes, you want to have some holdings.
Data Sources
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^DJI prices: https://www.investing.com/indices/us-30-historical-data
^DJI dividend yield: http://www.multpl.com/s-p-500-dividend-yield/table?f=m
30Y UST yield: https://www.investing.com/rates-bonds/u.s.-30-year-bond-yield
30Y UST price: https://www.investing.com/rates-bonds/us-30-yr-t-bond-historical-data
Gold price: https://www.investing.com/commodities/gold-historical-data
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“Hippy Christmas”
by septahelix
2018 – Licensed under
Creative Commons
3 Comments
Gold is a 'systemic risk' insurance, with no financial counterparty risk…imo. If the Fed had not been able to save the run on the banks in 2008, what would your graphs now look like. Considering they came within hours of a 'meltdown', it does not inspire me with confidence that everything is fixed. You have insurance and hope it is never needed, but like all insurances, it is money thrown away every year…until you need it. 🙂
Do you need insurance?
Just another way of looking at things.
are you talking gld or physical for investing…
I have a physical gold channel I discuss this a lot