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Here is the chart of the results for various stores of wealth Year to Date. And a second chart shows the results for the past three years.
As a side note, I do not include currency investments. The Swiss franc has been a spectacular performer, but like the metals it pays little or no interest. The average person loses money in currency arbitrage based on my own observation. They tend to overleverage, and panic at sharp moves. I have been fortunate in it, remarkably so, for which I am grateful. But that appears to be an exception.
The 10 Year Treasury does not include interest obtained for the 1/2 year. TNX was around 3.8 percent in January, so we can tack on about 1.9 percent interest bringing the total return on the Ten Year Treasury to about 5.9 percent.
Notice the variance of risk, that is, the deviation of a return from a steady trendline. This is why trading in and out is only for the professionals, and why some investment returns may be more 'risky' than others.
The swings in silver are particularly notable in the three year chart. It is a 'riskier investment.' Gold has had the steadier and more reliable returns.
So, one obviously should consider their time frames and risk tolerance when crafting their portfolio.
But one can sometimes find a fundamental trend, and if proven valid, then hold fast to it no matter what, until that fundamental trend changes in its character. It is especially effective if one has some specialized knowledge in that area, and some natural affinity to follow it as a complement to their chosen profession or intellectual inclinations.
That is the way to the growth and the preservation of wealth. Charts are useful for testing and validating, a sort of a roadmap that sorts facts from fiction, and for the selection of entry and exit points.
But a trend based on well-reasoned fundamentals is the thing.
They'll print money until we run out of trees."
Jimmy Rogers
Gold was hit hard, then rallied, then hit into the end of day again, pretty much in the manner which I had expected it would be.
So what next? I think the metals will continue to be capped and under pressure, since the deficit deal, as bad as it might be, provides a rallying point based on fear of discovery for the paper mongers.
As shown in the Gold/US Debt chart over the weekend, the longer term trend is obvious and understandable. The denials of those who do not wish to see it will become increasingly bizarre as the fundamental trend progresses and the world monetary system evolves.
Change is occurring. And it does not matter whether you accept it or not. It is unfolding even as we speak.
A big swing in the stock markets today, as they opened much higher, and then plummeted on the ISM report, and more jitters about the deficit faux deal.
NonFarm Payrolls at the end of the week. See the comments intraday below.
As a reminder, in addition to the Debt Ceiling Fandango, the real economy continues to chug along.
The market was shocked a bit by the miss in the ISM number this morning.
There are a few more important numbers being reported this week that have the potential to influence the markets, especially the Non-Farm Payrolls.
The July Non-Farm Payrolls report is interesting because like January it is one of the few monthly reports in which the raw actual number is revised significantly higher using a seasonality factor. This provides a fair amount of leeway in reporting the headline number, which itself is likely to be revised a month or two later.
As a reminder, isolated numbers, rather than the running trend, tend to be an integral part of the Wall Street/Washington magic lantern of perception modification.
I always like to look at the forecast from Briefing.com in addition to the consensus of economist forecasts. They run hot and cold like all individuals including myself, but it is good input nonetheless.
