Comments on: Gold Price Climbs Back to $700/Ounce http://www.thesunsfinancialdiary.com/investing/gold-price-climbs-back-to-700ounce/ Fri, 03 Feb 2012 17:42:24 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Sunhttp://www.thesunsfinancialdiary.com/investing/gold-price-climbs-back-to-700ounce/#comment-22292 Sun Tue, 11 Sep 2007 02:21:35 +0000 http://www.thesunsfinancialdiary.com/investing/alternative/gold-price-climbs-back-to-700ounce/#comment-22292 I agree with you that diversification isn't just about return. It's about maximizing return and minimizing risk as the same time. And what happened in the past doesn't mean it will happen again in the future. However, history is all we have right now and we can get a sense what future may look like under various assumption. If we believe the economy will continue to grow even at 3% annually, 80 years from now, S&P can only get much, much higher. Predicting short-term result is difficult, but for the long-term, it's relatively easier.As for gold, I still feel it's a good diversifier because of it's weak correlation with the broad market (however, if investing through mutual funds, the correlation is not that weak anymore. In that sense, gold ETFs may be a better choice) and the demand for gold is still there especially in the developing countries. Unfortunately, gold can never be really consumed. As production continues, there will be more and more gold on the market. But gold still has its appeals to many people and they will hold it for a long, long time. And that could create opportunities to have gold in the portfolio.Just a thought. I agree with you that diversification isn’t just about return. It’s about maximizing return and minimizing risk as the same time. And what happened in the past doesn’t mean it will happen again in the future.
However, history is all we have right now and we can get a sense what future may look like under various assumption. If we believe the economy will continue to grow even at 3% annually, 80 years from now, S&P can
only get much, much higher. Predicting short-term result is difficult, but for the long-term, it’s relatively easier.

As for gold, I still feel it’s a good diversifier because of it’s weak correlation with the broad market (however, if investing through mutual funds, the correlation is not that weak anymore. In that sense, gold ETFs may be a better choice) and the demand for gold is still there especially in the developing countries. Unfortunately, gold can never be really consumed. As production continues, there will be more and more gold on the market. But gold still has its appeals to many people and they will hold it for a long, long time. And that could create opportunities to have gold in the portfolio.

Just a thought.

]]> By: Lizhttp://www.thesunsfinancialdiary.com/investing/gold-price-climbs-back-to-700ounce/#comment-22202 Liz Mon, 10 Sep 2007 07:12:57 +0000 http://www.thesunsfinancialdiary.com/investing/alternative/gold-price-climbs-back-to-700ounce/#comment-22202 In my view, diversification isn't only about big returns, it is also about security. A fallacy in the world of finance is assuming that previous returns can be used to predict future returns. They can't be. Great that the S&P has gone up up up over the past 80 years. That doesn't mean that it will keep going up for the next 80 years. There is no way to know. Not to be a downer : ) In my view, diversification isn’t only about big returns, it is also about security. A fallacy in the world of finance is assuming that previous returns can be used to predict future returns. They can’t be. Great that the S&P has gone up up up over the past 80 years. That doesn’t mean that it will keep going up for the next 80 years. There is no way to know.
Not to be a downer : )

]]> By: NIdhihttp://www.thesunsfinancialdiary.com/investing/gold-price-climbs-back-to-700ounce/#comment-22026 NIdhi Sat, 08 Sep 2007 16:39:26 +0000 http://www.thesunsfinancialdiary.com/investing/alternative/gold-price-climbs-back-to-700ounce/#comment-22026 very good website. Lots of good info and personal stories. I have added a link from my website.Nidhi<a href="http://creating-wealth.blogspot.com" rel="nofollow"> http://creating-wealth.blogspot.com/ </a> very good website. Lots of good info and personal stories. I have added a link from my website.

Nidhi

http://creating-wealth.blogspot.com/

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