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FYI: When a stock you hold shows up on the list of 52-week lows, it is never a good feeling, but when it drops to a 5-year low depression starts to set in as half a decade has been wasted holding on to this loser of a stock. Gold is closing out the week at 5-year lows, and while not an equity, you can trade it using an ETF (GLD). Also, given the fact that GLD briefly overtook SPY as the largest in the world back in 2011, it probably takes up a spot on the portfolio holdings page of many investors out there. Regards, Ted https://www.bespokepremium.com/think-big-blog/gold-closing-out-the-week-at-five-year-lows/
Many things are at/near 5 year lows, including emerging-market equities (EEM), emerging-market debt in local-currencies (EMLC), most commodities (DBC), MLPs (MLPI). Looking at a 5-year chart, without doing anything else, and drawing inferences as to the investment merit of an asset is... foolhardy.
AU/USD, like most of the investment classes cited above are a function of the strength of the USD. --- I say this, because AU, while down in USD terms, is NOT down across all currencies. Its down vs. USD, GBP, SFR over 5 years. AU is also down vs CNY -- but then CNY's is (usually-) manipulated to track the USD. However AU is UP vs the CAD$, Yen, rand, rupee, AU$, ruble and MXP. AU is (essentially) flat vs. EUR.
The strength in the USD is itself a function not of American economic strength, but of our economy being the "cleanest dirty shirt", and of waning commodity demand from China. No one can foresee when these trends will reverse, but I suspect, they will reverse/mean-revert at some time. I suspect AU will still experience a "capitulation panic", however, generally assets are best bought when they are cheap, not dear. US equity enthusiasts should keep that in mind, as we are now in the 7th year of a very, VERY high-return equity bull. No tree grows to the sky.
AU can be first/foremost thought of as portfolio insurance -- providing diversification of returns over long periods of time. During the past 5 years, US equities have done wonderfully. So US equity investors were rewarded, while their AU holdings declined. OTOH, during the 2000-2010 period, equity returns languished/were lousy, but bullion holders were well rewarded.
For anyone dis-enchanted with their bullion holdings, I have a standing offer: contact me, and I will be happy to haul away any of your unwanted bullion, and I won't charge you a fee for the service, not a dime.
Comments
AU/USD, like most of the investment classes cited above are a function of the strength of the USD. --- I say this, because AU, while down in USD terms, is NOT down across all currencies. Its down vs. USD, GBP, SFR over 5 years. AU is also down vs CNY -- but then CNY's is (usually-) manipulated to track the USD. However AU is UP vs the CAD$, Yen, rand, rupee, AU$, ruble and MXP. AU is (essentially) flat vs. EUR.
The strength in the USD is itself a function not of American economic strength, but of our economy being the "cleanest dirty shirt", and of waning commodity demand from China. No one can foresee when these trends will reverse, but I suspect, they will reverse/mean-revert at some time. I suspect AU will still experience a "capitulation panic", however, generally assets are best bought when they are cheap, not dear. US equity enthusiasts should keep that in mind, as we are now in the 7th year of a very, VERY high-return equity bull. No tree grows to the sky.
AU can be first/foremost thought of as portfolio insurance -- providing diversification of returns over long periods of time. During the past 5 years, US equities have done wonderfully. So US equity investors were rewarded, while their AU holdings declined. OTOH, during the 2000-2010 period, equity returns languished/were lousy, but bullion holders were well rewarded.
For anyone dis-enchanted with their bullion holdings, I have a standing offer: contact me, and I will be happy to haul away any of your unwanted bullion, and I won't charge you a fee for the service, not a dime.
Additionally, CEF (phys gold/silver CEF) now trading at over a 10% discount.