Thursday, February 10, 2011

Investors Embrace Even Riskier Assets?

February 10, 2011
Investors shift money from gold to riskier assets

Investors who bought gold for $850 in January 1980 and sold gold for $256 in April 2001 lost 87% of their purchasing power (once inflation was factored in).

What could be more risky than that? I'm almost afraid to ask.

Stocks, which are considered riskier assets than gold, have been rising since the beginning of the year.

Who considers it? Even Japanese stock market investors buying at the peak in 1990 didn't lose that much purchasing power. In fact, they lost less than half as much.

5 comments:

getyourselfconnected said...

Mark,
time points do matter. When the UK's M. King sold almost all their gold at about $250 people thought he was smart for getting out before zero. Now, not so much.

Mr Slippery said...

Riskier assets usually turn out to be whatever I just bought ;)

getyourselfconnected said...

Mr. Slippery,

hear you there!!!!!! Great line.

Stagflationary Mark said...

GYSC & Mr Slippery,

Surely the masters of finance would not have been sucked into such a lousy trade!

May 24, 1999
Business: The Economy
Gold prices at 20-year low


The Swiss reckon the cost of lost interest in holding gold rather than US Treasury bonds is equivalent to around $400 a year per household.

July 19, 1999
Miners pay most for gold's fading brilliance

Prices have continued to drift lower as investors anticipate sales of gold by the International Monetary Fund and the central bank of Switzerland.

Oops. My bad.

Stagflationary Mark said...

Pleasae forgive me. I was given an opportunity to heckle Cramer and nearly blew it!

February 29, 2000
The Winners of the New World

So, whom does that eliminate? First, any company that is a commodity producer simply can't be owned, no matter what.