US investors what are you doing to protect yourself from inflation?

[FelixDeCat]

^This is suspect. Back in the day, it was not uncommon to pay $200+ per trade to buy or sell stocks. Later "discount" brokers got it down to $49 and less in the early 1990s. When the WWW came along, online brokers had it around $19 then eventually $9.99 per buy AND sell ($20 round trip). Starting in 2020, the commissions went to zero.

So unless you waited until you had an amount high enough in paid dividends to overcome the absurd commissions from the 1930s until the late 1990s, its unlikely your returns would have been that high.


Also, I created an Excel spreadsheet using a more realistic rate of return of 10% annually. That averages out bull markets and bear markets from 1933 to 2022. Assuming no dividends (AND CERTAINLY NO COMMISSIONS) were reinvested, I get an ending balance of $111,573:



Starting around the year 2000 or so, commissions were $10-$20 to buy, so you can throw in a 2% kicker, which is the typical big cap stock dividend.

Giving the kicker might leave you a balance of $150,000. However you have to live 89 YEARS to get there, and start investing the day you are born!

 

[zinfamous]

This is a pretty powerful image. Definitely need to buy more silver and gold.

so, you have a 100 year plan for a 5 year problem?

seriously: how stupid are you?

 

[zinfamous]

Stock market is in a huge bubble right now though. There's no knowing how long it will stay like that. Stock market can indeed be high return but it's also high risk. I mean, sure the price of silver/gold could maybe tank too but I think the odds of that are smaller as there is a real cost to mine/process it.

Not linking to image directly since there's swearing and don't think that's allowed, but thread here:

https://www.reddit.com/r/Wallstreetsilver/comments/ug7fvm

Ok, so that still shows the image anyway... oh well lol.

dude.

you tried to make a 100 year-long argument for metal in the face of this100 year argument being absolutely obliterated by some 1 million% gains for paper stocks. lol. Stop being stupid about this. the stock market will always destroy your stupid example in this stupid time frame that you have conjured.

just fucking stop sucking at simple math.

stop it. please.

seriously though: what are you going to do with your 10 gold coins out in your cabin in the woods, collecting rain water and shitting in compost, to make tomatoes, grown from your own shit? Do you really think your pocket-full of gold coins have any actual value in that "ideal scenario" that you envision?

 

[zinfamous]

^This is suspect. Back in the day, it was not uncommon to pay $200+ per trade to buy or sell stocks. Later "discount" brokers got it down to $49 and less in the early 1990s. When the WWW came along, online brokers had it around $19 then eventually $9.99 per buy AND sell ($20 round trip). Starting in 2020, the commissions went to zero.

So unless you waited until you had an amount high enough in paid dividends to overcome the absurd commissions from the 1930s until the late 1990s, its unlikely your returns would have been that high.


Also, I created an Excel spreadsheet using a more realistic rate of return of 10% annually. That averages out bull markets and bear markets from 1933 to 2022. Assuming no dividends (AND CERTAINLY NO COMMISSIONS) were reinvested, I get an ending balance of $111,573:

View attachment 60940View attachment 60941

Starting around the year 2000 or so, commissions were $10-$20 to buy, so you can throw in a 2% kicker, which is the typical big cap stock dividend.

Giving the kicker might leave you a balance of $150,000. However you have to live 89 YEARS to get there, and start investing the day you are born!

it's a fair point, regarding fees, and also you didn't mention that, IIRC, you can't really just "invest in the S&P" in 1933 because not only did that index not exist, I think, there was no concept of index funds...one had to do a lot of work to spend on those ratios, thus accumulating even more fees in aggregate? But still...even with those fees, and even if you go back 10, 20 years from now, in comparison, the gains in metal are absolute garbage when compared to Real Property and stocks. It's silly, trite, and an argument that hates simple maths.

 

[Red Squirrel]

This has nothing to do with math and all to do with risk assessment. Nobody can predict the market, no matter how good they think they are. It's good to diversify. I'm not saying one should dump everything in silver and gold, but it's good to have some physical too and not rely 100% on electronic. (stock and other instruments)

The original post was simply to prove that someone that had bought gold a long time ago would be safe from inflation today, that's all it was meant to indicate.

 

[pmv]

Nuka-Cola bottle tops, FTW.

 

[zinfamous]

This has nothing to do with math and all to do with risk assessment. Nobody can predict the market, no matter how good they think they are. It's good to diversify. I'm not saying one should dump everything in silver and gold, but it's good to have some physical too and not rely 100% on electronic. (stock and other instruments)

The original post was simply to prove that someone that had bought gold a long time ago would be safe from inflation today, that's all it was meant to indicate.

in the short term, that's correct.

But again, you are looking at 100 years for your argument. Anyone and everyone knows that over 100 years, the market goes up. ...a fucking shitton of a lot. lol. If someone bought shares in Dow or S&P companies in 1933 (whichever ones weren't bankrupt at that time), they would certainly be protected from inflation today, as well. A lot more than with holding a pile of metal in their hands.

 

[Exterous]

The original post was simply to prove that someone that had bought gold a long time ago would be safe from inflation today, that's all it was meant to indicate.

So this person who was old enough to buy gold in 1933 and is now 107 years old is safe from inflation...

Using that as an example is more "People who have had wealth for awhile are more safe from inflation that people without wealth"

Gold is a poor long term inflation hedge. It's a marginal volatility hedge and a suspected apocalypse/country collapse currency. If you want inflation protection there are vehicles specifically for that in the US: TIPS and I bonds

Gold as an Inflation Hedge: What the Past 50 Years Teaches Us

On the anniversary of the metal’s unleashing by Nixon, gold’s believers may be disappointed by the record.

www.wsj.com

 

[sdifox]

This is a pretty powerful image. Definitely need to buy more silver and gold.

You were around in 1933? I knew redheads are souless but damn.

 

[herm0016]

upgrading my infrastructure and investing in food security while the cash I have is worth something. adding to tax advantaged accounts.

 

[evident]

upgrading my infrastructure and investing in food security while the cash I have is worth something. adding to tax advantaged accounts.

I purchased solar panels outright last october..... it's a pretty modest investment but it should keep me hedged from the rising cost of electricity. I should break even in less than 8 years. I spent alot of money on house upgrades too. I have all of my investment money in S&P500.