- In the world of investing, the greatest sin is believing that "what happened in the past ten years will continue forever." We tend to forget that markets move in long-term (Cycles), and the attached chart is the best proof of that. - What do we see here? This chart does not measure the price of gold in dollars, but rather gold's performance against the S&P 500 Index. When the curve is rising (white areas), it means gold is outperforming stocks. The opposite is also true.
We are now emerging from a deep bottom (the era of tech stock outperformance), and we have begun to see a sharp upward shift. History tells us that when these cycles start, they last for years, as happened in the 1970s and early 2000s. - Why is this happening now? (the scary economic trinity) The chart points to a crucial point, which is that we are not facing a single economic problem, but a historic and complex "cocktail" that combines three previous crises:
1- The debt problem (the 1940s era): Governments are drowning in record debt. 2- The inflation problem (the 1970s era): The purchasing power of currencies is eroding. 3- Asset valuation inflation (the 1990s era): Stock prices are very high compared to their real earnings. - The takeaway for the smart investor: When these factors come together, major capital starts migrating from "paper assets" (stocks and bonds) to "real assets" (gold and commodities).
Gold here does not play the role of "quick profit," but rather acts as an "icebreaker" that protects the portfolio when stock valuations become illogical.
We are not at the end of the cycle; rather, it seems—as the chart shows—we are only in the early stages. Is your portfolio ready for this shift in balance?
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
Are we at the beginning of a new "golden age"?
-
In the world of investing, the greatest sin is believing that "what happened in the past ten years will continue forever."
We tend to forget that markets move in long-term (Cycles), and the attached chart is the best proof of that.
-
What do we see here?
This chart does not measure the price of gold in dollars, but rather gold's performance against the S&P 500 Index.
When the curve is rising (white areas), it means gold is outperforming stocks. The opposite is also true.
We are now emerging from a deep bottom (the era of tech stock outperformance), and we have begun to see a sharp upward shift.
History tells us that when these cycles start, they last for years, as happened in the 1970s and early 2000s.
-
Why is this happening now? (the scary economic trinity)
The chart points to a crucial point, which is that we are not facing a single economic problem, but a historic and complex "cocktail" that combines three previous crises:
1- The debt problem (the 1940s era): Governments are drowning in record debt.
2- The inflation problem (the 1970s era): The purchasing power of currencies is eroding.
3- Asset valuation inflation (the 1990s era): Stock prices are very high compared to their real earnings.
-
The takeaway for the smart investor:
When these factors come together, major capital starts migrating from "paper assets" (stocks and bonds) to "real assets" (gold and commodities).
Gold here does not play the role of "quick profit," but rather acts as an "icebreaker" that protects the portfolio when stock valuations become illogical.
We are not at the end of the cycle; rather, it seems—as the chart shows—we are only in the early stages. Is your portfolio ready for this shift in balance?
Share your opinion in the comments..
And follow me for more $BTC #SUIETFLaunched