Posted: Feb 23, 2019 4:18 am
by Thommo
Not strictly related to this squabble, but here's why timing of buying and selling matters and superficial observations don't help.

Suppose you bought gold 40 years ago at the start of the year, the price was $227.15 per ounce. Today that gold is worth $1,328.95 per ounce, or 5.82 times more.

Suppose instead you bought a tracker fund for the Dow Jones. The Dow Jones opened 1979 at 811.42. Today that index is worth 26,031.81, or 32.08 times more (admittedly there would be some modest margin losses as the portfolio updates).

Sitting on gold works if the market takes a sharp and unexpected dip. It has not worked over the medium/long term. Albeit it's better than mattress stuffing. Buying gold as a genuine hedge (to offset currency or stock shocks with genuine crises looming) is reasonable, but even then it really matters when you buy and sell.

If fiat currency carries on for even just another decade, avoiding it entirely could still result in massive relative losses. And bitcoin has nothing like the stability, underlying asset value or track record of gold. Falling for this marketing spiel that it's "digital gold" is an absolute epitome for the phrase "there's one born every minute". As investments they could barely have less in common.