How investments did for 2011 GOLD Jan 1 2011 - $1405 Jan 1 2012 - $1564 Gain = $159 Gain = 11.32% SILVER Jan 1 2011 - $30.63 Jan 1 2012 - $27.74 Loss = $2.89 Loss = 9.43% PLATINUM Jan 1 2011 - $1755 Jan 1 2012 - $1396 Loss = $359 Loss = 20.45% S&P 500 (with all the king's horses and all the king's men) Jan 1 2011 - 1275 Jan 1 2012 - 1257 Loss = 18 Loss = 1.41% The math speaks for itself. Congratulations to all of you who held gold through the year. I've said before and I will say it again that past performance is no indication of the future. (but Gold is the boss of investments. )
^ I've also said before and will say again the economy of 32 years ago, which is beyond the investment lifetime of the vast majority of adults, is irrelevant now. Interest rates were 20%. Do a search on my posts for why. Furthermore IF you had simply put the $10,000 limit (by SS#) in an inflation protected savings bond you would have beaten everything but Boss Gold. SAVINGS BOND I-SERIES Jan 1 2011 - $10,000 Jan 1 2012 - $10,306 Gain = $306 Gain = 3.06% I-bonds are not subject to state taxation either.
Fatima I am with you 100%, besides the world is not the same as before. Communications are instant, taste and preferences have changed. Necessities are others. Technology is way different. Internet... Gold is still the Boss until proven wrong!!!
You believe fed is going to raise rates to reduce the money supply and as a result the dollar is going to strengthen? Unlike the 80s we are nation of debt now..
The S&P500 had a total return in 2011 of 7.8% and the Dow 8.5%. And the dividends and capital gains are taxed at 15% or less at the federal level.
Double digit interest rates, i don't think Fed will even stomach a hike to 4% nor can our economy handle it without going into a recession.
On the first count you are simply wrong. S&P 500 ended lower than it started as indicated in the OP. I didn't list the Dow average of 30 stocks but the gain was so slight it's not relevant. I assume you could possibly find and index that made a slight gain. On the last count, capital gains are taxed depending upon your specific situation. There is no fixed amount. Boss Gold beat them all.
Using the start and end of a year is really a pointless starting and ending point and tells little of the story of each PM for the year.
I agree, but then again, so is celebrating the fact the year changed from 2011 to 2012. It's an indicative marker that humans, which follow the Christian calendar, usually appreciate seeing.
I think the best index to use for the average investor is the Dow Jones Industrial Average because it contains the type of large cap stocks that most investors buy [or should buy]. It can be pretty easily replicated by buying stock in DIA. Now the Dow ended 2010 at 11,577.51 and ended 2011 at 12217.56 which outperformed I bonds even without adding in the 2% or so dividend.
I don't agree with this at all. There are many, many more people who own an S & P Index Fund as opposed to a DJIA 30 Index Fund. If you were performing research, would you rather have a test group of 500 or a test group of 30. The S & P de facto provides a much wider sample of how the stock market really performed. Among investment professionals, the S & P 500 is the benchmark most often utilized. In the interest of full disclosure, the S & P basically broke even on an appreciation basis for 2011.
I agree that the S&P contains more stocks and is more representative of the market. But I believe the Dow is more representative of how most people invest. There are many small obscure companies in the S&P that might be closely held or held by certain investment firms, but I don't believe they are representative of what small investors do with their money. One huge flaw in the S&P is that it is capitalization weighted and therefore a disproportionately large amount of money invested in the index is in companies that are priced high relative to their earnings, book value and revenue. So the Dow would normally be the better benchmark for individuals even if the pros use something else. My only point here is to point out that there are other investment choices that should be looked at before declaring one to be better than all for all investors.
Cloud, the largest funds (SPY,VG 500, VIN etc) that people are invested in track S&P500 not in Dow30.
This is why I listed the S&P 500. It's the index held by most people. In comparison, the Dow is a arbitrary weighted index defined controlled by banksters who routinely change it to keep it looking good. I can't say that I ever ran into anyone who used the Dow for fund buying until this topic. (and certainly I've known nobody who went out and bought the equivalent stock) Sure that is an anecdotal observation, and I won't deny the Dow is a valid index, but it wasn't listed in this topic for that reason. The return on the Dow in 2011 was 5.53% which, IMO, also isn't very good considering the risk vs the 3.06% return on the very safe I-bond with it's lack of state taxation. In comparison Big Boss Gold, handily beat them all down. There is room for this metal in everyone's investment strategy. I continue to advocate for long positions with gold, hold the physical, and ignore the ones who tell you that it's in a bubble and going to fail. As the 2011 results show, it's the results that matter, not the words and what grandpa did with his money in 1980 has no bearing. This is yet another year in more than a decade of years where gold has done very very well. Most working adults in the USA statistically invest for approximately 25 years of their lifetimes. This rise in gold represents 40% of that period.
All I know is if you were the portfolio manager of the Bill and Melinda Gates Charitable Foundation and you went before their board of directors to make your quarterly investment update and told them you were using the DJIA 30 as the benchmark for the performance of their account, you wouldn't have that account very long. The DJIA might be a nice reference point to look at every day, but because of the criteria used to include the stocks contained therein, it is definitely not a true measure of stock market performance. Also, if the truth be known, I believe what most small investors do with their money is buy S & P index funds or large cap mutual funds that invest in S & P 500 stocks (especially in 401ks, IRAs, 529s, TIAA/CREF, etc.), so it definitely is the benchmark to be used, as opposed to the DJIA.
