Visualization of stock market performance over time, adjusted for inflation

Re:Visualization of stock market performance over time, adju... by iwwr on Monday January 03, 2011 @09:06AM (#2063152)

Compare a stock portfolio with a simple precious metals basket. The stock market is a poor longterm store of value.

It's very hard to stay ahead of inflation with securities whose value can be fudged by cheap money. In fact, pension funds can't even make +inflation guarantees, only best efforts through low-risk investments. And even if they did, they would be lying.

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Re:Visualization of stock market performance over time, adju... by lsc on Monday January 03, 2011 @09:46AM (#2063246)

>Compare a stock portfolio with a simple precious metals basket. The stock market is a poor longterm store of value.

while I agree that this would make a very interesting chart, do you have a reference for that?

I mean it's clear that during the last 10 years, nothing has touched metals, but if you were in gold for the 10 years before that, things wouldn't have gone quite as well.

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Re:Visualization of stock market performance over time, adju... by encoderer on Monday January 03, 2011 @10:06AM (#2063302)

I keep hearing "Gold always goes up."

It gave me this thought..

2010 "Gold Always Goes Up" 2004 "House Prices Always Go Up" 1999 "The US stock market always goes up"

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Re:Visualization of stock market performance over time, adju... by bodyfour on Monday January 03, 2011 @11:40AM (#2063657)

Sort of like: 1979 "Gold Always Goes Up"

http://mjperry.blogspot.com/2010/09/chart-of-day-inflation-a...

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Re:Visualization of stock market performance over time, adju... by nostrademons on Monday January 03, 2011 @10:30PM (#2065730)

I think it's fairly obvious that there's a bubble in gold right now, and I would gleefully short it if I didn't suspect that the market will stay irrational longer than I can stay solvent...

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Re:Visualization of stock market performance over time, adju... by mynameishere on Monday January 03, 2011 @10:42AM (#2063423)

http://www.ritholtz.com/blog/wp-content/uploads/2010/05/4-2-...

Also, gold is tax-disadvantaged.

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Re:Visualization of stock market performance over time, adju... by lsc on Monday January 03, 2011 @12:53PM (#2063958)

I'm aware of some of the disadvantages; my understanding is that if I buy a Krugerrand, it appreciated (even if it's just keeping up with inflation) and I sell it, I need to pay a higher "collectors" tax rate rather than capital gains.

However, my understanding is that this is fairly easy to get around, either buy going for a ETF like GLD, buying stock in a company that owns gold 'in the ground'

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Re:Visualization of stock market performance over time, adju... by amh on Monday January 03, 2011 @02:11PM (#2064281)

Problem is, precious metals have an expected return of 0%. One gold bar sitting on a shelf is still one gold bar ten years later. Commodities are not necessarily a bad idea to own in moderation, but stocks and bonds are what allow your portfolio to benefit from economic growth.

For those who are enamored with gold and want to invest conservatively, I would look at something like the Permanent Portfolio (http://crawlingroad.com/blog/2008/12/22/permanent-portfolio-...) Not how I would invest personally, but the PP isn't an unreasonable approach.

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