Wednesday, November 25th, 2009

The Gold vs Stocks Switch

Mar 5th, 2008 | By Brian Hunt | Category: Gold Market

Something huge is happening in the markets right now. It’s a trend that shows up in the “gold vs. stocks ratio.” Not one in a hundred investors pays attention to it.

We’ve encouraged investors to keep a good chunk of their wealth in “hard assets” like gold, oil, and silver for years. In March 2006, we presented a chart showing how hard assets – represented by gold – were soaring against paper assets – represented by the S&P 500. We highlighted this trend again in a Thanksgiving series of unusual asset comparisons.

You see, once every generation or so, stocks vastly outperform hard assets… then a “switch” goes off and hard assets outperform stocks for years and years. For the complete explanation of this phenomenon, we encourage you to read this excerpt from the January 2006 issue of True Wealth, which you can access for free here.

If you read and understand just one thing this week, please make sure it’s the idea contained in that issue. With that idea in mind, you’ll understand why the trend shown in the chart below – the outperformance of gold vs. stocks – is likely to continue for a good while longer.

$spx:$gold daily chart graph


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By Brian Hunt

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Brian Hunt is managing editor of Daily Wealth.

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The DailyWealth mission is to show you how to avoid risky investment, and how to avoid what the average investor is doing. We believe that you can make a lot of money and do it safely by simply doing the opposite of what is most popular.

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