6Mon
I'm pleased that someone has delved deeper into the subject of gold! Unfortunately, not many people here do.
I myself have had the entire B&H portion of my portfolio in gold since 2018 (currently almost 40%). Is doing much better than WeltAG.
But!
The topic of gold is much more complex. Gold may be a reliable hedge against inflation, but only over very long periods of time, around 100 years. For all periods below that, the point is pretty irrelevant. In the medium term, around 10-30 years, the correlations with real interest rates, money supply and government debt are more relevant. Even shorter, around 3-10 years, the USD cycle is dominant. In the short term, 0-3 years, gold is almost completely uncorrelated with equities, which makes it a highly interesting diversification asset in multi-asset strategies.
There are separate studies and justifications for each point. Very few "experts" are familiar with this range and concentrate on one aspect.
I personally trade the aspects of uncorrelatedness and the USD cycle. In other words, I am already slowly reducing my gold position. In 2026, when gold should be at USD 4500, I will probably sell around 70-80% of my gold. But because the USD is likely to have depreciated by 30-40% by then, there won't be much of the performance left in euros. So I have already started selling.
As I said, it's a bit more complicated. But it's worth it. 👍
I myself have had the entire B&H portion of my portfolio in gold since 2018 (currently almost 40%). Is doing much better than WeltAG.
But!
The topic of gold is much more complex. Gold may be a reliable hedge against inflation, but only over very long periods of time, around 100 years. For all periods below that, the point is pretty irrelevant. In the medium term, around 10-30 years, the correlations with real interest rates, money supply and government debt are more relevant. Even shorter, around 3-10 years, the USD cycle is dominant. In the short term, 0-3 years, gold is almost completely uncorrelated with equities, which makes it a highly interesting diversification asset in multi-asset strategies.
There are separate studies and justifications for each point. Very few "experts" are familiar with this range and concentrate on one aspect.
I personally trade the aspects of uncorrelatedness and the USD cycle. In other words, I am already slowly reducing my gold position. In 2026, when gold should be at USD 4500, I will probably sell around 70-80% of my gold. But because the USD is likely to have depreciated by 30-40% by then, there won't be much of the performance left in euros. So I have already started selling.
As I said, it's a bit more complicated. But it's worth it. 👍
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@Epi Yes, I said that it can make sense to add gold, but that it is not THE asset to compensate for inflation. I myself currently also have gold which I inherited
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6Mon
@Christianxys Unfortunately, the statement "It CAN make sense to add gold" is not very helpful for most people. This is because the statement applies to pretty much all asset classes besides MSCIWorld.
The question is: WHEN does it make sense for WHICH portfolio to add HOW MUCH gold?
The result of my research (see my article from 2023): Risk-optimal for B&H WeltAG is 30%, minimum is 15%, everything below 10% is irrelevant.
Next: At the moment I would only buy hedged or leveraged gold. Everything else is nonsense because of the falling USD.
And I wouldn't even look at inflation. In the inflation year 2022, gold did not perform at all; since inflation has fallen, it has risen significantly. I would say that inflation and gold do not correlate at all in the short to medium term.
The question is: WHEN does it make sense for WHICH portfolio to add HOW MUCH gold?
The result of my research (see my article from 2023): Risk-optimal for B&H WeltAG is 30%, minimum is 15%, everything below 10% is irrelevant.
Next: At the moment I would only buy hedged or leveraged gold. Everything else is nonsense because of the falling USD.
And I wouldn't even look at inflation. In the inflation year 2022, gold did not perform at all; since inflation has fallen, it has risen significantly. I would say that inflation and gold do not correlate at all in the short to medium term.
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6Mon
@Epi Entry, Stop Loss, TP1/ TP2/TP3?
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