Anyone here changes his mind about gold and think we should be buying now?
This forum does not teach speculation but investment by asset allocation.
1. However, gold is seen by some speculative even within your Asset Allocation and serve no purpose whereever.
2. but I don't see it as a negative. It is because of its erratic behaviour compounded by its large BETA aka magnitude that it serves nicely ONLY when it is part of an all season portfolio.
3. An all season portfolio is very diversified comprising of equities, gold/commodities/TIPS, long duration/intermediate bonds, and lastly CASH.
4. Currently I hold no more than 10% in gold and I don't care whether it goes up or down as I see my portfolio as a whole. But I beefed it up with inflationary bonds, I may bring it down to 5% and keep it there.
5. Gold 81% of the time moves similar to your equity.
6. Gold performs very very badly in a rally or tightening or USD strengthening
7. Best to see gold as a currency for easy decision, no diff to an emerging currency but has the FANTASTIC benefits of not being limited by the fiscal/monetary/economic policies of these emerging like currency countries such as Australia, CAD and the UK. So with just a little let say 5 percent always, you have a decent hedge when the USD is debased.
8. More S&P 500 you hold, the more benefit GOLD shines during debasement.
9. However, international shares can serve a better purpose than GOLD. The more international shares you gold, the less GOLD/ or any inflationary hedges you need.
10. I think that if your equity component is very well diversified e.g. 40 percent S&P 500, 40% ex-USA developed, 20% Asian.....you really need very little or zero gold. Your EX-S&P 500 shares will SHINE, not forgetting the S&P 500 will still profit from a weakening USD but not as much as the rest. This leaves you room to decide whether you wish to invest a true more reliable inflationary hedges like short term TIPs, and more reliable nominals for deflationary scenarios.
8. Don't believe the hype gold is for inflation hedge, etc etc..no evidence supports it for any purpose .........except it moves due to investors expectations. It is just not reliable.
9. It is this unreliability (uncorrelated) that I like gold but in small amounts no more than 20 percent but I think 5-10 is better and get more reliable alternatives such as inflation linked short term---and long term TIPs.
10. There is an argument by Bridgewater to replace some nominal bonds with TIPs i.e. 10 year or more..........as I'm convinced after watching them move for long enough that indeed there is a high correlation between long term TIPs and nominals--a dual effect but lack beta in both cases, ........but observation seem to imply to have the same beta as nominal treasury intermediate but more clarity to confirm.
11. Lastly, I think you should perceive gold as part of your equity component due to it moving with equity a lot during USD debasement, and it makes a lot of sense when you just see it as a currency as it is USD priced.
12. NEVER hold gold by itself. I know a dude who sold his house everything, to buy all GOLD. Those were the days in 2013. He lost hell a lot.
13. If you want to speculate. Then I will wait USD 1800. Remember, speculate is gambling. In fact I have money for GOLD speculation, and so far have been very lucky, maybe because I have fast fingers, I can sense fear being a fearful person myself .........
do you guys know that around 3pm-5pm... vs 10-11pm........that whatever happens earlier get magnified later assuming other variables do not change ? If a speculative asset such as gold drops significantly while I sleep, it will reflect at 3pm/4pm...the european markets sentiment will reflect from there on...and later magnified when the USA market opens.
Make a decision to sell/buy/hold before the USA market opens.
Thanks.
How much liquid cash should he set aside for emergency like hospital bills etc? He doesn't have any hospital insurance and already has pre-ex conditions.
1. I don't know your families financial situation hence how can I recommend an emergency amount ?
2. Things like whether you may be able to support your dad.
3. age of dad, fully paid residence, goals, expectations etc etc ?
4. Assuming no debt, fully accommodation, no liabilities to support like his kids or grown up kids who only goal is to fleece their parents...then I personally think he does not need more than 10k in his bank.
5. Don't forget there will be recurring cashflow from the ERS every month.
6. And he already is covered by a hospital insurance which is the mandated govt basic plan medishield life, any preexisting will already be covered whether you get it after or before. However, upgrading the level of cover, if i'm NOT mistaken WILL NOT be covered.
7. If you have read enough of BBC or this forum, you will realise there is a central theme that you won't need CI insurance. This is exactly also why you do not need cash to cover "hospital bills". Hospital bills I refer to that you have to stay in the hospital for greater than 24 hours. It will then be covered by your hospital insurance and the excess payment will be covered by your medisave.
8. but if the illness is not serious that warrants medical treatment such as a cosmetic removal of fat deposits, then that has to come out of your pocket. Still CI won't cover such things.
9. And don't forget once FRS is set, and Medisave is maxed. And also contribute 37.7k to your CPF yearly. He still has that so called EMERGENCY fund in his CPF bank account sitting in the OA and SA ( I don't recommend touching it) that he can withdraw anytime that is growing every year. An also the excess money he invests can be conservative 2 fund (VWRD/MBH) 50:50, to allow him to withdraw cash from the MBH component if he really really needs it i.e. only touch your equity or bond component when it is at a good price to sell not during let say a crisis we recently had.
