I think this was an excellent article from Team Clark.
Interesting thing is, he used to suggest it was ok to have 10% of your holdings in gold. Now he’s suggesting 3-5%. Personally, I think the 10% is still OK.
He also favors ETFs / ETNs which track gold. I own those, but I also own physical gold in secure offsite storage. Maybe do half physical, half ETF / ETN?
All in all, a solid article, thanks Team.
Physical copper and nickel coins too. I like them because you can always get the face value back at any time. Take up room but as an emergency fund account, they have value.
In a SHTF scenario, real metal will be how seashells and beaver pelts were traded. Bullets and food and medicine are also needed.
As a hedge for long term, how has gold done versus stocks, bonds, real estate, etc? I like silver too as it is affordable but the price growth of it has been less stellar the past 14 years.
Over the past 20 years, gold and the SPY ETF are about the same. And they are not correlated at all. I am always concerned about buying at the top. Many people advise newbies on this and other forums, “Buy VTI, buy SPY, buy QQQ, buy VOO” etc. That smacks of recency bias, and a powerfully seductive 13+ year recency bias at that. I can guarantee you VTI, SPY, QQQ won’t be leaders over the next 13 years. It’s mathematically impossible Trees do not grow to the sky! I want to buy low and sell high, not buy high and sell low (after I get discouraged).
The only thing I regret about gold is having too many gold mining stocks, but I’m not selling at a near-term bottom. But I have an exit price in mind, and when I get there, I will sell.
Just my opinion but $1675 gold price is a dip to buy. I’m fully invested however.
The “inflation hedge,” thing doesn’t appear to be working this time around… 
During the Y2K scare ages ago, most believed the best SHTF trading goods would be, water, booze, tobacco.
I have a large amount of gold in my portfolio. I started buying at $1050 in December 2015. It just cracked $2300. I’m satisfied it’s finally on the move and the dead money in my portfolio has become undead. That’s in spite of a strong US Dollar.
If we get some interest rate cuts, and/or some stock market weakness, and/or Dollar weakness, those will send it higher.
It is very uncorrelated with stocks or bonds that’s why I like it. It’s frustrating for long periods of time, but it fulfills a role in a portfolio.
Postscript - the yield on my gold has been 10%. Same as long term stock market… but for a long time it was frustratingly low. It’s not for the faint of heart.
Look at my July 2022 reply. $1675 was a good dip to buy.
Im going to say No! Not now…not ever…
How has gold done compared to something like an EE bond or US treasury market in general? I ran the Portfolio Visualizer on it. Also included fixed quarterly purchases for a 100% bond portfolio versus a 100% gold one:
https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&sl=Obr7sOXp2UFCC2bmsN8aX
Without quarterly purchases, bonds do better than gold:
https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&sl=7LYdwuBWklWQu6vt8mDNd3
So, it is 50/50 chance gold can do better than long term holding of bonds. The beauty of gold is you can store and never have to worry about lost paperwork or other roadblocks. As long as you can find a buyer, the gold should be money.
As you know portfolio backtests never predict the future. I bought the gold because I judged that it was in a low price trough from 2016-2017 when I did my buying. I was correct. Based on US debt and geopolitics I think I will have the chance to sell it for much higher than it is currently in the 2030s. How much higher? No one knows. I do intend to sell most of it by age 75. I don’t want to be Grandpa who forgot where he put the family gold.
Wow gold is up 29% in about six months.
When Boy Clinton was president, he started making noises about socking it to the rich. I started buying an ounce of gold a month. For a good while I was paying $250 an ounce.
Encountered a friend of a patient with a very strange retirement policy. From a young age he started buying silver. I guess because silver was more affordable than gold when he was young. Sometime he switched storing it to a foreign vault which also offered buy/sell services.
He did not tell me how much he was worth, but he married a Tanzanian woman and bought a farm in that country. Grows most of his own food. Says he could live on about $5000 a year if he wanted, but spends more visiting the US from time to time.
The interesting thing is the IRS does not get notice of the bullion sales. It is not a bank account nor a brokerage account. So. by investing in bullion, he pays no US taxes in retirement. (Yes he pays a commission on silver bullion sales.) I guess he pays some real estate tax in Tanzania.
Quite a novel way of planning for retirement. If one is a die-hard against paying taxes as this guy is, his plan worked out pretty well.
Or is the value if fiat money down 29% in six months?
Fiat US Dollar is not doing that at this time.
What is your explanation if you think confidence lost in US dollar is not the reason?
I did some comparisons of my house value in 1985 versus now in terms of how many ounces of gold it would buy. Turns out the house appreciated even against gold.
It is said that government is the only entity that can make valuable commodities like paper and ink worthless.
I’m going to give you some facts… since gold bottomed in Nov 1 2022, the US Dollar index is down 4.83%, while gold is up 46.32%. No, the world did not lose confidence in the US Dollar!
Gold is up because the market is sniffing out future interest rate cuts by the Fed, because it was oversold, because of Central Bank buying, because of political uncertainty (Mid East, Ukraine, US governance), because Chinese investors are fleeing real estate and equities and the money has to flow somewhere (remember… the USA in not the only country).
But I assure you, it’s not because confidence in the US Dollar has been lost at this time. It may be lost in the future. Not at this time.
I bought a small 950sf starter home in SF in 1976 for $76K [easy to remember] Sold it a few years later for $144k.
Today, zillow rates it at $1.583,800.
Easy to see how newly employed cannot buy a home, at least in SF. Even renting would be ~$4,229.
And this was not in prime area. Those start at $2-3M
Should have kept it as a rental. Hindsight is 20-20.
Same story in parts of Atlanta the same time. A patient said he couldn’t get rid of a house between Little Five Points and Inman Park. Now it is worth over a million.
If you say the dollar purchasing power has declined only 4.83% in 1.5 years, you got fudged inflation stats and don’t go to the grocery store.
