The TRUTH about the stock market: It's been crashing since the tech bubble burst...

[statman]

http://static.businessinsider.com/im...-sept-2010.jpg

[EuropeanFootballMale]

So? Now look at a chart comparing the S&P to real estate prices since 2006. Stocks have been on a tear.

[Indy Coug]

So why is indexing by gold a valid metric?

[Pheidippides]

So why is indexing by gold a valid metric?

Because it's a plentiful resource that never has wild fluctuation swings and/or severe regulation that threatens supply since it doesn't use anything toxic like cyanide to produce it?

[byu71]

http://static.businessinsider.com/im...-sept-2010.jpg

So the stock market rise from the early 80's to the tech bubble burst was a heck of a lot bigger than we thought.

I love these analysts that come on TV and say, the price of gold going up so much is telling you something and then predict the future based on what "gold" is telling us.

Well, what was gold telling us before when it went extremely high like the late 70's early 80's. How about oil at $150 a barrell or the COMP over 5,000 in early 2000.

One of my favorite phrases during my whole career has been, the "market" is telling us or the "smart money" is. All they were telling us is a reflection of current conditions and investor reaction, they weren't telling us anything about the future or a heck of a lot less than one would think.

[statman]

So why is indexing by gold a valid metric?

It's as "real" a price as there is.

[jay santos]

It's as "real" a price as there is.

More real than the dollar?

[Indy Coug]

It's as "real" a price as there is.

Really? How so?

[pellegrino]

gold has been good to me.

[statman]

More real than the dollar?

The dollar's value fluctuates relative to other currencies pretty dramatically based on what our long-term interest rates look like. And it fluctutates year over year due to inflation. That leaves you two moving targets that you need to peg to to get a ful understanding of 1) how was our market doing compared to itself in alternate years, and 2) how was our market doing when compared to other markets.

An ounce of gold in New York in 1977 is an ounce of gold in Singapore in 2010...

[beefytee]

The dollar's value fluctuates relative to other currencies pretty dramatically based on what our long-term interest rates look like. And it fluctutates year over year due to inflation. That leaves you two moving targets that you need to peg to to get a ful understanding of 1) how was our market doing compared to itself in alternate years, and 2) how was our market doing when compared to other markets.

An ounce of gold in New York in 1977 is an ounce of gold in Singapore in 2010...

And a dollar bill is a dollar bill. So what? Where is the comparison to oil, corn or anything else that had concrete value? Some would argue that those are better comparisons since gold doesn't have a lot of practical value. Gold's value had gone up and down, just like dollars and just like other commodities.

Yes, gold is just as useless today as it was back in 1977 and it is only really valuable because (like dollar bills) we place an inherent value on it.

[Uncle Ted]

Coins/stamps or S&P500 index fund? Which was a better investment?

US five cent coins contain over 7 cents worth of raw material as of this afternoon, mostly copper and of course, nickel. If there is inflation, the prices of metal will increase, and the coin will have 8, 9, 10 cents worth of metal. Pre-1965 dimes contain over $2.42 of metal today, while pre-1965 quarters have over $6 worth of metal.

[...]

If coins are too heavy for you, try "forever stamps" sold by the United States Postal Service for 44 cents. These stamps are good for one first class letter no matter what the price of a stamp in the future. They were first sold for 41 cents on April 12 2007.

If you had invested 100 dollars into the Sp500 on the same day of the first "Forever Stamp" after re-investing dividends you would be DOWN 1.3%, and down more after any broker fees and taxes on the dividends. If you put $100 into forever stamps, you are UP over 7%.

[Viking]

gold is really nothing more than a proxy for the confidence level global investors have in central bankers. since the era of low/no rates began with greenspan, the chart you show speaks for itself

[SeattleUte]

Because it's a plentiful resource that never has wild fluctuation swings and/or severe regulation that threatens supply since it doesn't use anything toxic like cyanide to produce it?

lol

[Babs]

So why is indexing by gold a valid metric?

duh. because he posted truth in ALL CAPS. fiat.