RetireJapan

TokyoBoglehead wrote: ↑Fri Aug 11, 2023 6:20 am In Japan, where interest is near zero, having a chunk of your cash/cashlike assets in gold seems perfectly reasonable.

Why?

No one reason, I already gave, is because it may increase the returns and lower the risk on one’s portfolio, judging by past performance - even though it is a non-productive asset.

It does not seem unreasonable to me to care about those return and risk numbers, as an investor. If not comparing asset allocations by those types of numbers, what is a better way to make comparisons?

Still, at the end of the day an investor should be happy owning the stuff in their portfolio.

sutebayashi wrote: ↑Sat Aug 12, 2023 5:13 amNo one reason, I already gave, is because it may increase the returns and lower the risk on one’s portfolio, judging by past performance - even though it is a non-productive asset.

It doesn't though. If you compare to a low cost basket of global equities over the long run, gold just lowers your returns. As you would expect, and as has happened.

This discussion is getting a bit tedious. Please try to keep it in line with the forum's principles: we're trying to help each other.

Just saying the same thing over and over again without providing new information or sources is not helpful. Trying to 'win' or have the last word is not helpful either.

I didn't realise that people actually needed the numbers, I thought this was so well established everyone & understood it. Blue line is how much you make in 40 years holding gold. Orange line is MSCI World. Neither number includes fee's, which I imagine are lower on an index fund than a gold bullion storage fund.

Deep Blue wrote: ↑Sat Aug 12, 2023 6:16 am I didn't realise that people actually needed the numbers, I thought this was so well established everyone & understood it. Blue line is how much you make in 40 years holding gold. Orange line is MSCI World. Neither number includes fee's, which I imagine are lower on an index fund than a gold bullion storage fund.

rt.JPG

Are you arguing from a position of good faith? No one is suggesting a 100% gold allocation.

If you want a serious answer, then you will need to look at the volatility differences in portfolios that hold gold.

100% Global stock allocation through a fund like Emaxis Slim All Country is not the right portfolio for many individuals, for many different reasons. In fact, the data suggests a five-factor portfolio is superior for a number of quantifiable and provable reasons. It is just a pain in the arse to recreate in Japan.

https://papers.ssrn.com/sol3/papers.cfm ... id=2287202

(I am however 100% global stocks).

I didn’t suggest holding gold would not reduce risk. I said it would reduce returns. Which it does.

There are other ways to reduce risk and return. Personally I’d just hold cash or a money market fund if I wanted to reduce my risk and returns.

FWIW my investment portfolio’s were all 100% equity funds until a couple of months ago too. I started buying a UK gilts fund so now I’m about 95% equities 5% gilts.

Deep Blue wrote: ↑Sat Aug 12, 2023 6:16 am I didn't realise that people actually needed the numbers, I thought this was so well established everyone & understood it. Blue line is how much you make in 40 years holding gold. Orange line is MSCI World. Neither number includes fee's, which I imagine are lower on an index fund than a gold bullion storage fund.

rt.JPG

The 40 year total return advantage for the S&P 500 versus MSCI World was approximately +1000%. I would’ve thought that was understood too .

Ben will be along to say you need to put a chart to show that soon

Deep Blue wrote: ↑Sun Aug 13, 2023 7:44 am Ben will be along to say you need to put a chart to show that soon

Here you go.

(Ref: longtermtrends)