For the period 1928-2013, the average annual compound real return of stocks = 6.3% and gold = 2.0%. However, the price of gold was controlled by the government until the mid-70s when the US finally abandoned the gold standard. For the period 1976-2013, the average returns were stocks = 7.2% and gold = 2.0%.
/wp-content/uploads/2018/03/logo.png00Stockradar/wp-content/uploads/2018/03/logo.pngStockradar2014-05-19 23:48:302014-05-19 23:48:30Stocks vs Gold - And the winner is............
What goes to the heart of the price for any commodity? Supply and demand. Fukishima caused a big supply drop and China is about to fire up its 19th nuclear reactor.
‘China fired up its 19th nuclear reactor as the nation pushed to more than double its expansion of atomic power generation capacity this year, which may boost demand for imported uranium.
China may need to import more than 80 percent of its uranium by 2020 as it expands its nuclear construction and operations, compared with about 60 percent currently, Tian Miao, an analyst at North Square Blue Oak Ltd., a London-based policy researcher, said by phone today. The nation will add 8.64 gigawatts of atomic capacity this year, compared with 3.24 gigawatts in 2013, according to previously announced targets.’ Source: The Short Side of Long
China could really surprise us all when it comes to their uranium demand.
/wp-content/uploads/2018/03/logo.png00Stockradar/wp-content/uploads/2018/03/logo.pngStockradar2014-05-13 23:25:212014-05-13 23:25:21Uranium - It's a clean sweep for China
This has occurred on 38 occasions since 1990. The next 20 trading sessions averaged a gain of 1.9% and the next 50 sessions averaged a gain of 3.51%, with only a handful of losing instances in each. case.
The conclusion is not to jump in with both hands and buy this market.
Rather, the data exercise has accomplished two things:
1) tempered my bearish leaning; and
2) illuminated the kind of market we are in.
The trend is your friend no matter what.
/wp-content/uploads/2018/03/logo.png00Stockradar/wp-content/uploads/2018/03/logo.pngStockradar2014-05-13 01:20:472014-05-13 01:20:47Breadth - Who cares?
Before we can move on to a hypothetical example of a difficult period for stock-and-bond-only portfolios, it is important to understand the concept of bond market vigilantes. According to the The Roosevelt Institute:
A bond vigilante is a bond market investor who protests a country’s fiscal policies by selling off its bonds and refusing to buy them. This happens when the bond investors perceive the policy to be inflationary, and can act as a check on a government that is over-spending. The proof of vigilante action is high interest rates, as yields rise when investors perceive risk; this makes a government’s cost of borrowing rise.
Bond vigilantes can also come out of the woodwork to protest low-interest rate policies from the Fed. Bond vigilantes worry that excessive money printing will eventually spark inflation, which erodes the purchasing power of interest payments made to bond holders.
/wp-content/uploads/2018/03/logo.png00Stockradar/wp-content/uploads/2018/03/logo.pngStockradar2014-05-12 00:30:362014-05-12 00:30:36The Bond Vigilante
Only 10% of Australians trust financial advisors. AFR 5/5/2014. A scary figure.
The “trust busting” GFC took a heavy toll on the financial advice industry. Most advisors floundered without a sound strategy for protecting your capital.
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