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Investor Derby: Gold Won First Quarter, Stocks Win Long Term
FYI: Another quarter, another lesson in long-term investing. Economic uncertainty around the world and a brutal start to the year for stocks helped send the price of gold surging to its best quarter in 30 years. But an analysis of 10 common investments by the Associated Press shows that regular investors who put a steady amount of money every month into an account like a 401(k) would have been far better off in stocks or bonds. Regards, Ted http://www.bigstory.ap.org/article/9e6749ab7e694bf3b95cb56be104cbe4/investor-derby-gold-won-first-quarter-stocks-win-long-term
The article indicates if one had put the money in REITS, rather than the S&P, one could have done even better.
The problem with these types of articles is there is they are based on a single "end-point". --- With stocks near all-time highs, and gold 4-5 years into its bear market, the case to avoid gold is a easy --- but fallacious argument to make. It could just as well been made in Dec 1999 -- but would have proven a lousy argument to have made over the ensuring decade.
Read this before Ted posted it (pretty rare!). I thought the article a bit shoddy. 5 & 10 years (to my thinking) are too short of time frames to draw big assumptions. If I recall, they compared gold's performance to the S&P 500, REITS, and international and EM markets over the past 5 & 10 years. All of these are subject to substantial deviations over short periods. But I do think the overall point being made is valid: Investing regularly over time in a broad basket equities can be very profitable. Hard to disagree on that. But the time frames used are very short.
Re gold, I sold all of my small speculative position in OPGSX last week. It was up 37% YTD and 44% since I bought it around Labor Day last fall. Still exposed a bit through other funds; but pure plays on this stuff (or miners) are bit like snacking on nails. Not for everyone.
Hi Ted, I receive updated AP business feeds on Amazon's Kindle daily. Also receive the Reuters feed and a lot from NYT - also on Kindle. Am certain the story was in one of those last evening. Read story about 8:00 PM EST. Sorry if you posted it earlier. Might have missed it. Also get Bloomberg BW and Barron's print. So finding it hard to keep up. Often a week behind on Barron's - not that it matters.
Comments
The problem with these types of articles is there is they are based on a single "end-point". --- With stocks near all-time highs, and gold 4-5 years into its bear market, the case to avoid gold is a easy --- but fallacious argument to make. It could just as well been made in Dec 1999 -- but would have proven a lousy argument to have made over the ensuring decade.
Re gold, I sold all of my small speculative position in OPGSX last week. It was up 37% YTD and 44% since I bought it around Labor Day last fall. Still exposed a bit through other funds; but pure plays on this stuff (or miners) are bit like snacking on nails. Not for everyone.
Regards,
Ted
Regards
Correction: I should have said Eastern DST.