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View Poll Results: Best Long-term Portfolio Hedge Vehicle
Precious Metal (Gold, Platinum, etc.) ETF or Mutual Fund 4 30.77%
Metal Mining Mutual Fund or ETF 0 0%
Energy ETF or Mutual Fund 5 38.46%
General Commodity ETF or Mutual Fund 5 38.46%
Multiple Choice Poll. Voters: 13. You may not vote on this poll

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Old 08-24-2007, 04:58 PM   #21
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Originally Posted by wildcat View Post
Have you looked at historical correlations between prices of commodities and interest rate environments?
Nope, but I can google with the best of them:

Monetary influences on commodity prices

That's real interest rates. I'd expect a tighter relationship to nominal rates since commodity prices factor into inflation. Then again, inflation has been low for a while now while commodities have been on fire....
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Old 08-24-2007, 05:09 PM   #22
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Originally Posted by twaddle View Post
Nope, but I can google with the best of them:

Monetary influences on commodity prices

That's real interest rates. I'd expect a tighter relationship to nominal rates since commodity prices factor into inflation. Then again, inflation has been low for a while now while commodities have been on fire....
Good information to consider timing the entry into these vehicles.
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Old 08-28-2007, 04:04 PM   #23
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Originally Posted by FIREdreamer View Post
I've heard that historically, people have also used diamonds to carry their wealth accross borders when bad times arose. With diamonds, your life savings can fit in your pocket, and as for gold, the value of a diamond is universally recognized.
About 20 years ago, the was a book called "The Rise and Fall of Diamonds". A good read for those who think that diamonds are a convenient substitute for gold.

The problems with diamonds include subjective and arcane grading systems, the inability of the typical investor to verify diamond grading, and huge buy-sell spreads in anything except the professional markets.

If you are a professional diamond merchant, they make sense as an alternative to gold. For the rest of us, fugeddaboutit.

On gold, it seems to me that there are better ways to hedge or diversify your portfolio than gold. But for an "End of the World as We Know It" scenario, it makes some sense.
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Old 08-28-2007, 10:59 PM   #24
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At it's peak in 1929 the DJIA was at 381 at that moment in time an ounce of Gold was worth $20.63. Since that time to today the DJIA has increased 34.2X Gold has increased by 32.1X. The advantage the DJIA has really had in almost 80 years is the dividends paid growth in intrinsic value compared to gold has been almost nil...

In 1973 gold ws at $50 an ounce and the DJIA was at 1000. Both have increased since then by about 13X.

The world did not end in either case yet gold was a very good hedge when the market was at a peak in the past. When the stock market is at a ratio of 20 to 1 vs goldyou are near full value of the Dow historically speaking with a very long view. But most probably would have difficulty believing gold 80 years from now might have the same relative value as an investment in the DJIA.
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