Toro
Diamond Member
Gold and other precious metals have their place in a portfolio - a very small percentage for prudent investors (I recommend 5% to 10% maximum).
Tell me Toro, how many dividends did gold pay over the last 40 years? ZIP, NADA, NIL, ZERO. You can't just exclude S&P 500 dividends from your analysis and expect to be taken seriously.
I agree that Gold has outperformed over the last few years. That alone is a compelling reason to sell and re-balance after this run-up. The axiom, "Buy low, sell high" comes to mind. Re-balancing a portfolio forces an investor to do just that. Best of luck with your gambling.
I am fully aware that one includes dividends reinvested when calculating returns. However, it was you who was being being derisive towards gold, not me towards stocks or any other investment. The fact that gold so decisively beaten the stock indices proves my point - there is a time and a place for everything. Since 1970, gold has risen about 9% compounded, which is slightly less than the long-term compounded average return for stocks including dividends reinvested, beating bonds and real estate.
Sure, if you are a long term investor, i.e. the next 10 years, you might want to own stocks over gold. Over the next 100 years, I would rather own stocks. But if I am highly confident that I can make a lot of money in gold in a fairly short period of time - as I already have and expect to continue to do so - then I would be a fool not to. And I would apply that standard to any investment. I was pounding the table on stocks in these pages six months ago when the median price/earnings ratio on stocks in the Russell 2000 was less than 6x, and less than 8x on the S&P 500, a generational low. If you know what you are doing - meaning if you know how to trade and protect yourself - I think you can make a lot of money in gold from these levels IMHO. But you have to know what you are doing. And that ain't gambling.