Sarah,
Let's assume the current equity bull market and the commodity bear market continue for a while (for how long? who would know?..).
So S&P adds another 30% to the current S&P price and the Gold will lose 30% more from the current price. That will make S&P around 2800 range and the Gold goes down to $700.
That means the ratio of S&P vs. Gold to 4:1 which is an extreme condition in historical perspective. The ratio of 4:1 may be more than 3 standard deviation away from the norm. So what would happen if that becomes true? Try to revert and bring it down to the norm...right? Typically, when that happens, it overshoots and the ratio then becomes less than the parity. So imagine the case of the ratio become less than parity...with the assumed prices...You may quadruple your wealth...right? Just an idea...though.
On Thu, Jul 30, 2015 at 9:44 AM, sarah_oz@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:
*LOL*
Paul,
Let me give you an example of what could occur based upon what has occurred in the past.
The price of gold rose 0% from 1980 to 2007.
That's 22 years.
How long do you plan on living, and why would you invest in a commodity
that rises slower than the S&P 500?
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Posted by: Paul <ur12bfriend@gmail.com>
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