Investing in Gold
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- Опубликовано: 7 окт 2020
- Should you add gold (or gold ETFs) to your portfolio? In this video, Justin analyzes the historical data going back to 1972 (from a Canadian perspective) to determine whether gold has been a decent safe haven, portfolio diversifier, return enhancer, and inflation hedge for investors.
Please feel free to download the model portfolios from my blog before getting started:
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Great breakdown Justin! Really insightful!
@Ways To Wealth - Thanks for watching! I'm glad you enjoyed the video :)
Wonderful video Justin, thank you!
@MassMoments - You're very welcome - thanks for watching! :)
Excellent Gold insight! thank you
@InspirMédia - Glad you enjoyed it!
I don’t invest in Gold but I invest in Justin’ s RUclips videos.
Really happy to see you addressing this topic! Any thoughts on precious metals equity (as opposed to bullion)?
@blizzard762 - The ETFs in my model portfolios have adequate exposure to these companies, so I wouldn't overweight them relative to their market caps.
Great content! I have put money in kirkland gold . New subscriber here!
@Canadian Investor - Thanks for subscribing to the channel - it's greatly appreciated! :)
"Today the world's gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce -- gold's price as I write this -- its value would be about $9.6 trillion. Call this cube pile A.
Let's now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world's most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?"
“[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility.”
-- Warren Buffett
we love you Justin, I apologize on behalf of the person who disliked the video.
Awww ... I love you all too, Arjang! ;)
No need for apologies ... it was probably my buddy, Dustin Tate :)
This is the best "Gold" video.
@P Chan - Thanks! I tried to keep the discussion as unbiased as possible (even though I had my own personal views on gold investing going into the analysis).
Justin, have you ever made an article/video on how much liquid cash someone should hold? I know risk tolerance is a huge factor, but I don't even know the acceptable range.
@Kar Yung Tom - How much cash to hold is a very personal decision. Currently, I generally hold very little cash in my clients' portfolios, unless they are regularly withdrawing from their accounts. However, my clients tend to keep a cash buffer in their personal savings accounts (usually around 6 months of expenses).
Would like to seen analysis on Bitcoin and ETH
@Antonio - There's unfortunately not enough historical data to run a decent analysis with either currency.
Whats your take on ETFs with a 20% bond allocation at the moment (XGRO vs XEQT for example)?
@Daniel Tojcic - Investors need to understand that taking more risk doesn't guarantee higher returns, even over longer-term time horizons. For example, between 1970 and 2020, a 100% equity ETF (like VEQT) would have underperformed an 80% equity ETF (like VGRO) in over 61% of the 373 rolling 20-year time periods.
How does the Plain portfolio compare to a portfolio of 60% stocks 35% bonds 5% gold?
@William Zhang - A portfolio with 60% stocks, 35% bonds and 5% gold (between 1972 to 2019) would have returned around 10.26% on average, with a standard deviation of 9.06%. Its Sharpe ratio of 0.48 would have fallen between the Shiny and the Plain portfolio (i.e. slightly higher risk-adjusted returns than the Plain portfolio, but slightly lower than the Shiny portfolio).
Hello sir, what do you use to add graphics to your videos? Yhank you.
@ArchSilber - I use an animator :) But they use Adobe Premiere Pro and After Effects.
@@JustinBenderCPM Thank you, sir!
FRUGALITY WINS
Great content thanks for all your hard work
@Shawn J - Nice!
Happy to provide this content to all of you :)
Hey Justin, thanks for all your videos. Any plans to do a best ways to get exposure to Crytpo/Bitcoin video ?
@Dom R - No plans at the present time, but that could change ;)
I'm a bit torn on this video. I'm a huge Canadian Couch Potato fan, I have huge respect for Justin, Dan and Ben. I came here because my advisor recently add a gold ETF and I was not happy. I don't believe commodities are a wise choice, not necessarily bad, just not wise. I have to potential issues in this video. The first is that XIC did have a 46.5% price drop, however that is slightly mitigated as it pays dividends. Commodities don't do that. I think it's important to consider total returns. My second issue is with the model portfolio since 1972. Gold saw an astronomical rise during the 70s. Prior to 1972 the price was artificially restrained by the government. While other factors influenced the price, I can't help but consider that removal of the price limit saw the increase play out over nearly a decade.
@Tom Cowan: I re-ran the numbers for the period 1980 to 2019, and found the Sharpe ratio was similar for both the gold portfolio and the no-gold portfolio.
The video was meant to illustrate that adding a bit of gold to a portfolio will likely not have a meaningful impact (either good or bad). Based on this data, I was even more comfortable excluding gold from my clients' portfolios (but I also wouldn't argue with an investor or advisor that wanted to add a small slice to their portfolio).
@@JustinBenderCPM Appreciate your feedback and running the numbers again. As I mentioned my advisor service recently added gold, I wasn't happy with the change. I get the sense it's reactionary. I took the video as more in favour of gold, probably more than than I should have. I am not a fan of commodities that make no money, pay no dividends, can't innovate, etc. I do appreciate the potential benefit of an non correlated asset class for a portfolio that is regularly rebalanced.