2012/2013 Fiscal Cliff

[Petunia 100]

According to this site, ignoring dividends, 1k invested in the S & P on Jan 2, 1973 would be worth $10,466.05 now. If you include dividends, the same 1k would now be worth $36,796.69.

http://dqydj.net/sp-500-return-calculator/

The dividends are real, you can't simply ignore them to make a point.

[Petunia 100]

Fallacy?
How so?
Do people only own an index?

I noted in one of your earlier posts you mentioned a time frame of 40 years.
Let's take a look at that shall we?


S&P 500 closed 1972 @ $118.
$1000 / $118 is 8.474 shares

S&P 500 closed @ $1414 Friday
8.474 shares X $1414 = $11,983.

Gold closed 1972 @ $63.71
$1000 / $63.71 is 15.7 oz of gold.

Gold closed @ $1670 oz Friday
15.7 oz X 1670 oz = $26,219.


We could look at the Dow, but the Dow is worse.

We could go back farther, but there again, both indicies do worse.

As for a barter system; what if you nothing I want to trade for something I have?
A medium of exchange is neccessary for commerce.

Where are the reinvested dividends? Looks like you are completely ignoring them. If you want to compare accurately, you must include them.

[Carpenter]

Not all of them. You can, with some amount of predictability buy and sell stocks based on economic conditions and even time of year. Look at utility stocks since 2008. Most have done pretty well. Look at discount retailer stocks. Also, they have done well. If you are stuck in one asset like gold, then you lose all of your flexibility and all of your ability to changed based on conditions.

And if you want to hedge against catastrophe, then start buying guns and ammunition. Gold will do you no good when someone with a AK-47 comes breaking your door down.

Here is one trading strategy that returned gold investors a handsome profit.

Overnight Long/Intraday Short Gold Fund More Than Doubles In Just Over A Year:
Generates 43% Annualized Return

I'd give you the link, but your site won't allow it yet.


Trading is not my thing, but active investors can do well, or poorly in any investment.

As for my defense strategy, I intend to call 911.

LOL

[Carpenter]

You're absolutely right. Today, there is a commonly accepted value to our currency, even though it has no real value, just as there is a commonly accepted value to gold, which also has no real value. But we aren't talking about today. We are speaking hypothetically about a time when the economy has collapsed. At that point, our currency will be worthless. Gold would be equally worthless. It has no inherent value. Food, water, shelter, fuel, etc. all have real practical value. In a catastrophe, those things would become the "currency" of choice.

People will continue to produce even in a catastrophe.

Surely it is how you will survive beyond your capacity to store food and water.

Consider the logistics of trading your particular service for the product of another.

They are trading "gold for bread in Zimbabwe" google it for a youtube video.


Inflation is stealing the value of your currency, gold is a means of halting the theft.

[bjl584]

I don't "invest" in gold. I own gold as a hedge against catastrophe.



One can lease gold (or silver)for income.

Don't the stocks of companies, dependent on the sale of goods and services for income, rise and fall with the economy?

Not all of them. You can, with some amount of predictability buy and sell stocks based on economic conditions and even time of year. Look at utility stocks since 2008. Most have done pretty well. Look at discount retailer stocks. Also, they have done well. If you are stuck in one asset like gold, then you lose all of your flexibility and all of your ability to changed based on conditions.

And if you want to hedge against catastrophe, then start buying guns and ammunition. Gold will do you no good when someone with a AK-47 comes breaking your door down.

[disneysteve]

Insert the word "money" in any of the scenarios you have outlined.

If you have no use for money, then go find somebody with butter to trade for elessar78's corn.

Good luck.

You're absolutely right. Today, there is a commonly accepted value to our currency, even though it has no real value, just as there is a commonly accepted value to gold, which also has no real value. But we aren't talking about today. We are speaking hypothetically about a time when the economy has collapsed. At that point, our currency will be worthless. Gold would be equally worthless. It has no inherent value. Food, water, shelter, fuel, etc. all have real practical value. In a catastrophe, those things would become the "currency" of choice.

[Carpenter]

If I'm hungry, I don't want gold. I want food.
If I'm thirsty, I don't want gold. I want water.
If I'm cold, I don't want gold. I want shelter.
If I'm in the dark, I don't want gold. I want gas for my generator.
If I'm sick, I don't want gold. I want medicine.
If I'm in danger, I don't want gold. I want ammunition.

I can't think of any scenario in which gold would be what I'm looking for. It wouldn't have any value to me.

Now that doesn't mean it wouldn't have value to someone else for some reason. It might. But I think what others are saying is they'd rather skip the middle man and barter directly for items that have immediate and intrinsic value.

Insert the word "money" in any of the scenarios you have outlined.

If you have no use for money, then go find somebody with butter to trade for elessar78's corn.

Good luck.

[Carpenter]

Gold doesn't pay a dividend or release earning statements. It rises and falls as a result of other economic factors. One could, in theory, buy and sell it over the course of time. But, anyone that tries to build a portfolio based soley on gold is foolish in my opinion. Putting all of your eggs in one basket whether it be all in one stock or all in gold is not a sound investment strategy.

I'd rather invest in a gold fund or in gold mining stocks or even manufacturers of mining equipment.

I don't "invest" in gold. I own gold as a hedge against catastrophe.



One can lease gold (or silver)for income.

Don't the stocks of companies, dependent on the sale of goods and services for income, rise and fall with the economy?

[disneysteve]

I don't know if I can barter with someone who can't grasp the value of gold.

If I'm hungry, I don't want gold. I want food.
If I'm thirsty, I don't want gold. I want water.
If I'm cold, I don't want gold. I want shelter.
If I'm in the dark, I don't want gold. I want gas for my generator.
If I'm sick, I don't want gold. I want medicine.
If I'm in danger, I don't want gold. I want ammunition.

I can't think of any scenario in which gold would be what I'm looking for. It wouldn't have any value to me.

Now that doesn't mean it wouldn't have value to someone else for some reason. It might. But I think what others are saying is they'd rather skip the middle man and barter directly for items that have immediate and intrinsic value.

[bjl584]

Can't the same trading strategies be applied to gold?

Gold doesn't pay a dividend or release earning statements. It rises and falls as a result of other economic factors. One could, in theory, buy and sell it over the course of time. But, anyone that tries to build a portfolio based soley on gold is foolish in my opinion. Putting all of your eggs in one basket whether it be all in one stock or all in gold is not a sound investment strategy.

I'd rather invest in a gold fund or in gold mining stocks or even manufacturers of mining equipment.

[Carpenter]

Choosing indexes to follow like the Dow or the S&P isn't realistic investing. Real investing is buying and selling many different stocks and funds over the years. Taking advantage of market downturns by buying, selling when things peek, reinvesting dividends along the way, maybe even dabbling in shorting stocks. Investing in this manner will most likely outpace any single asset like gold held for 60 plus years. What real persn buys a bunch of gold bars when they are 22 and sits on them all the way until they retire? I'd say no one, ever. All of these examples of following index funds and drawing comparisons makes for a nice argument on paper, but no one invests real money that way. It's all hypothetical. I'm not saing that gold and other hard assets don't have a place in a portfolio depending on conditions, but it isn't realistic to compare gold to the Dow or the s&P over a 60 year period.

Can't the same trading strategies be applied to gold?

[Carpenter]

You made a statement, I ask you to support it. If you don't then your assertions have zero credibility.

If you don't have butter? What do you have? Forget it, I don't know if I can discuss the value of gold with someone who can't grasp the barter system.

I supported the statement with it's source.

I don't know if I can barter with someone who can't grasp the value of gold.

How many different people should be brought into a transaction to accomodate the exchange of corn for something I don't have?

Gold is money:
something generally accepted as a medium of exchange, a measure of value, or a means of payment

[elessar78]

I'm not your research assistant. I gave you the source, look it up yourself.


Corn for butter?

What if I don't have any butter?

How will I get the corn?

You made a statement, I ask you to support it. If you don't then your assertions have zero credibility.

If you don't have butter? What do you have? Forget it, I don't know if I can discuss the value of gold with someone who can't grasp the barter system.

[bjl584]

Ah, I choose 40 years in responce to one of your posts.

If we go back 60 (again at your suggestion) gold does even better.

Gold closed 1952 @ $34.60

$1000 / $34.60 is 29 oz of gold.

Gold closed @ $1670 oz Friday
29 oz X 1670 oz = $48,430.

How does the Dow compare?

Gold does nearly as well since the inception of the S&P (1960).

What is the return on a $1000 dollars invested in the S&P since 1960?

$23-$24K ? ?

Choosing indexes to follow like the Dow or the S&P isn't realistic investing. Real investing is buying and selling many different stocks and funds over the years. Taking advantage of market downturns by buying, selling when things peek, reinvesting dividends along the way, maybe even dabbling in shorting stocks. Investing in this manner will most likely outpace any single asset like gold held for 60 plus years. What real persn buys a bunch of gold bars when they are 22 and sits on them all the way until they retire? I'd say no one, ever. All of these examples of following index funds and drawing comparisons makes for a nice argument on paper, but no one invests real money that way. It's all hypothetical. I'm not saing that gold and other hard assets don't have a place in a portfolio depending on conditions, but it isn't realistic to compare gold to the Dow or the s&P over a 60 year period.

[Carpenter]

Where did everybody go?

LOL.