Gold

Bull or Bear?

DYI:  Despite all this time since the year 2000 the gold bugs continue to reign supreme out distancing all others that DYI tracks.  How long will gold continue its winning ways??  Who knows!  What we do know is the Dow/Gold Ratio [chart below] currently hoovering slightly above average or fair value. [DYI places fair value at 16 to 1].

 

As of 3/1/19 Dow Gold Ratio is 20 to 1

This is why our model account has a 34% commitment to gold along with 63% in cash [short term bonds].  So no matter which way things go we have plenty of fire power to either buy gold, bonds or stocks all depending upon their valuations.

Just a quick remainder our model portfolio is designed to out perform the Permanent Portfolio – a fixed asset allocation of 25% in Gold, Stocks, Long Term Bonds and Cash – it is not an attempt to out perform the market.  Permanent Portfolio since May of 1986 to the end of 2017 [latest data I could find] is a sub par 6.2% and a 100% stock portfolio on average would have clock in at an even 10.0%.  DYI approach is to hit somewhere between the two with significantly less volatility!  Most folks only have a 20 to 30 year window to put it all together get caught in a long term bear market for stocks in the wrong age group you will not even come close to Harry Browne’s Permanent Portfolio let alone what one would have expected from the stock market in general.  That is what the financial portion of this blog is all about.               

3-1-19
Updated Monthly

Secular Market Top - Since January 2000

+125.4% Dow       

+251.6% Transports 

+166.9% Utilities

+89.5%  S&P 500

+85.1%  Nasdaq

+52.5%  30yr Treasury Bond

+354.5% Gold

+123.5% Oil
  +58.2% Swiss Franc's

    

From High to Low

+354.5% Gold

+251.6% Transports

+166.9% Utilities

+125.4% Dow
+123.5% Oil 

+ 89.5% S&P 500 

+ 85.1% Nasdaq  
+ 58.2% Swiss Franc's

+ 52.5% 30yr Treasury Bonds

December 1999 Shiller PE10 was 44.19               
August 2000 S&P 500 dividend yield was 1.11%

DYI