This is the Dow-Gold ratio historical strategy with the ratio currently at 20. So you don't say but you anticipate a recession going forward. Also from this ratio historically, its possible to head up to 30. Purchasing gold is then the safe option and the riskier option is to stay in stocks for longer. What a scam it all is, I wish I'd known more about this stuff when I was younger.
I've not spent much time looking at the dow-gold ratio specifically but it does fit what I expect to happen. We don't necessarily have to have a recession. What could happen is that the move in gold could outpace the move in the general market. I feel a good comparison would be the years 2000-2012. While we did have a recession for part of that, between 2003 and 2007, the market moved higher, it was just gold outpaced it.
This is a real upside down world. Do you think investors are accepting the negative bond returns because they are able to engage in unprecedented speculative activity in the stock market?
I think that could be part of it. Another part is leverage. Traders are able to use leverage to increase their returns. The final part is experience. Most of the guys sitting behind a trading desk today are in their 30s and 40s. They've never experienced a bear market in bonds. They have no basis for what is happening. So they keep doing what has worked in the recent past and hope for the best.
This is the Dow-Gold ratio historical strategy with the ratio currently at 20. So you don't say but you anticipate a recession going forward. Also from this ratio historically, its possible to head up to 30. Purchasing gold is then the safe option and the riskier option is to stay in stocks for longer. What a scam it all is, I wish I'd known more about this stuff when I was younger.
I've not spent much time looking at the dow-gold ratio specifically but it does fit what I expect to happen. We don't necessarily have to have a recession. What could happen is that the move in gold could outpace the move in the general market. I feel a good comparison would be the years 2000-2012. While we did have a recession for part of that, between 2003 and 2007, the market moved higher, it was just gold outpaced it.
This is a real upside down world. Do you think investors are accepting the negative bond returns because they are able to engage in unprecedented speculative activity in the stock market?
I think that could be part of it. Another part is leverage. Traders are able to use leverage to increase their returns. The final part is experience. Most of the guys sitting behind a trading desk today are in their 30s and 40s. They've never experienced a bear market in bonds. They have no basis for what is happening. So they keep doing what has worked in the recent past and hope for the best.
That makes sense, thanks!