Very true! That is precisely the plan. The ladder covers basic expenses plus some travel, dining out, and a gardener somewhere down the road. I have sufficient funds outside of the ladder for emergencies, future rungs of the ladder itself, extra fun stuff, charity, and eventually assisted living, if necessary. As one might guess, I’m not retiring early…
That’s not the right way to analyze it. You have to back-test the use of gold in a portfolio. By your reasoning, you should also never own cash, bonds, or non-US anything. So you should just own the S&P500 which is 40% composed of the Mag 7… which would be very dangerous. It’s so overconcentrated right now. Unfortunately, portfolioanalyzer put some of their tools behind a paywall. You used to be able to simulate 1970-Present. Now you can only do the last five years, which isn’t long enough. portfoliocharts has some tools for portfolio modeling, and it’s all still free.
I probably had too much gold in physical form, I should have owned more ETF. I just sold some out of a Roth IRA account, and the total spread, buy and sell side, was about 5%. In hindsight, ETF would have been easier, and it would have been about -0.25% expense compounded over 7.5 years… a total 2% loss, rather than 5%. But it tripled so I’m not terrible concerned.
Silver had a mini-crash day a few years ago, I bought a 100 oz silver bar for $1600 total. Now it’s worth $4,400. I’m going to hold until the gold-silver ratio decreases, and gold increases. I think I’ll sell it for $10,000. That might take up to a decade.
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Gold is up to around $4000 now. Cherry-picking my timeframe now, but since the top of the 2000 Tech Bubble until now, gold beats both NASDAQ and S&P500… by a lot!
Gold up 1260%, NASDAQ up 550%, S&P500 up 676%
It’s cherry-picking but possibly informative, because it’s very likely we are in a Tech Bubble right now.
But I’m not buying gold, I just sold some. It’s not really cheap any longer. It may go into a correction for months or a year from here…. but like clockwork, institutional and retail investors alike are chasing it to new all time highs.
It never changes… people hate to buy things on sale, they mostly only buy when there is a FOMO emotion in the air. In a few years… people will be disgusted with AI stocks.
What metric do you use to value Gold when you say its expensive vs cheap ?
It’s a tough question. There’s no definitive answer… predictions are hard, especially about the future.
But gold is at a new all time high even after adjusting for inflation…
Gold Prices - 100 Year Historical Chart
So that gives me pause, and caused me to sell off 1/3 of my holdings a few days ago. But I still have a lot by anyone’s standards, because of my belief that the US doesn’t really have a way out of its debts other than by continuous inflation to shrink the debt in real terms, or outright default. We’ve been talking about this crisis for decades, but…
“In fiscal year 2025, interest on the national debt accounts for approximately 13% to 15% of total federal spending, making it the third-largest budget item behind Social Security and Medicare.”
It’s going to get worse.
“In fiscal year 2025, the U.S. federal government added approximately $2.17 trillion in new debt, bringing the total to $37.64 trillion by year-end” (which was Sept 30, 2025)
DOGE was slightly adjusting the deck chairs on the Titanic. It wasn’t having a material effect. That’s why you don’t hear about it any longer.
One solid indicator is the price of Gold versus Silver.
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I think the devaluation of the US Dollar in 2025 has certainly helped the gold rally…..
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Yes, you should consider having gold in your portfolio right now, but with a moderate allocation of around 5-15%, as it acts as a hedge against inflation and geopolitical risks while diversifying your investments. Gold’s role is to provide stability and reduce overall portfolio volatility, not to be the largest component of your investments.
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Agree here, but I won’t complain if it becomes a leading component of my portfolio in the coming years. ! I’m sure I’d find some way to enjoy the gains. I guess as a symbol of my gold bugginess I put my gold entirely in my Roth IRA, because I expect it to do well.
I agree, but the price of gold pinned to the US$ can also be seen as an indication of confidence in the US$ as a world standard when compared to the Chinese yuan.
I think the sharp drop in April 2025 might be an indicator of that.
Why just compare the US Dollar to one other currency? Why not look at the US Dollar index, or ETFs UUP (dollar bullish) or UDN (dollar bearish?)
No good reason other than China is the next-largest player to the US in terms of production and trade and the relative value seems to lead this years tariff actions by a week or so.
With their large unmined gold reserves and all the ongoing mining activity they could be adding to their gold reserves without us knowing much about it.
They aren’t know for being transparent. Which is why I won’t use GLDM gold ETF… the custodian for the physical gold is ICBC, Industrial and Commercial Bank of China. I use IAUM instead.
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