Originally Posted by
Gunfighter
Gold is insurance against down markets, not a long term investment. When the market takes a header like the dot com bust, GFC and COVID, cash in the insurance (sell) and buy the market at a discount. A 25% correction in the S&P 500 (5,250) is where to cash in part of the insurance and buy the S&P. At 40% correction (4,200), cash in more of your insurance policy and buy more S&P 500. Over the ensuing years, rebalance by selling S&P and buying insurance. The recent market hasn't hit any of the execution thresholds.
Substituting managed futures contracts for a portion of gold will generate yield while holding the insurance. CTA and DBMF are two worth consideration.
I'm amused by the "all in" attitudes on investments that are balancing mechanisms in a well constructed portfolio. Don't let the dopamine rush kill your portfolio. My technique involves relatively small accounts at Tradestation, Robinhood and Coinbase where I can chase dopamine. The real stuff is at a different instutuon or a deed recorded at the county safe from the thrill of the chase.
I agree on Gold. Gold Miners are a value investor play. Gold Miners trade as if Gold is $3000. Gold recently dipped to $4300. The miners are printing cash and returning it to shareholders thru buybacks or dividends. The value investor gets paid to wait.
For most people indexing/broad ETFs/Bogleheads is the way to go. But if one has a passion for securities analysis, 4th grade level math skills, and calm emotions, they can easily beat market returns by mastering the principles of value investing. If an individual can do good valuation work, the market will reward them. Yes I am "All in". I'm All In on deep value. And I'll go to any sector that I can find it.
On this very forum the hate for Viasat was extreme, while the love for Starlink endless. Hate is one of the easiest ways to make money in the market as Mr. Market drives sentiment to nonsensical levels. Viasat stock was driven below the replacement costs of its assets, because of Starlink airline deal headlines. The lucrative government contracting side of the business was virtually free at $10/sh. Today Viasat is up over 600% from a year ago. Buying Joel Greenblatt style LEAPS resulted in 10x+ returns.
We are blessed with our 18% DC and Brokerage link option that can manage more money than many hedgefund managers start with. Combining that with a value investing strategy can yield incredible wealth.