["Or gold...I believe the operative word for this decade will be tangible assets."
I'm just not sure that Gold is necessarially going to be the "tangible asset" vehicle of choice for the coming decade.
I think Real Estate will continue to be THE choice. Not speculation in Real Estate, but reinvestment and upgrading the "nest" will be.
I believe Real Estate is going to continue to hold very solid in all but the most speculative-high end markets. In Middle America there is no Real Estate Bubble... not even close. The "Nesting" syndrome will continue to be significant and I believe that's the type of "tangible" investment that people will be making over the coming decade. People are investing in their homes and will continue to do so.
People can see, touch and feel Real Estate every day...they've had their parents & grandparents and every investment book & magazine in existance; all tell them for decades that Real Estate is the most safe of all investments and of late; it's proven to be exactly true.
People won't necessarially speculate in Real Estate, but they'll buy new furniture, add All Season-Sun Rooms, Patio Enclosures, Jacuzzi's, Home Theatre's, add new Vinyl Siding, Replacment Windows, new Room Additions, finish the basement etc.
I also think that given the very recentness of the IPO, Internet and Tech/Telecom Speculative Bubble in those "stocks" - that's it's going to be VERY hard for any "stock" sector, or even the commodity itself - to enter a "speculative-mania" environment. People were burned by the recent "speculative" environment in stocks... and I'm not so sure that either Gold Bullion itself - as tangible as it is; or gold stocks - or any investment vehicle for that matter; are going to be moved to any speculative mania levels anytime soon...as people were simply burned too badly - too recently in the tech-telcom/IPO Bubble. I think it may be a while, before we see the next speculative cycle in anything.
The market may just slowly grind ever lower as PE's compress and the economy endures a series of sputtering starts & stops.
I think things won't be as good as the Bulls expect, nor as bad as the Bears predict... but, merely somewhere in the middle as usually occurs.
Gold has only entered that upperband of $425-$450 twice in the last 27 years... and we've obviously endured some rather significant geopolitical, economic and market events during the last 27 years. History has shown that $350-$380 has been a pretty good level for gold over the years and that's where we find ourselves presently....so not a lot of High Reward-Low Risk upside remaining imho.
Something more significant than the collapse of Russia, the threat of Brazil, or Argentina defaulting; something bigger than LTCM, Enron, or World Comm actually failing, something more significant than Sept 11th occuring...will be needed to drive Gold significantly higher...and I'm not sure if that's a prudent bet, or realistic expectation.
And I am not shorting gold and I am still letting a 10% portfolio position ride here. But, the keyword in your comment is "decade"... I just think we're poised for a significant battle here shortly that's going to lead to another substantial pullback in gold....and it may be another year before the necessary potential drivers for significantly higher Gold Prices play themselves out...and in the interim, as those battles play themselves out; we've got to keep an open mind that we indeed may be seeing the highs pass before us presently...and that the economy may prove more resilient that anyone anticipates.
It's the valuations, more than the economy; that should drive the markets lower... and while gold "may" benefit as an alternative investment vehicle as market valuation/multiples compress... it also "may not"... and Real Estate along with boringly conservative vehicles such as CD's, Money Markets, Tax Free Muni's, High Dividend Stocks, or merely Conservative Bond Funds may continue to be the alternative vehicle of choice; along with the continued growth in the "Nesting" cycle.
Lot's of lessons learned in the very recent, prior Oilpatch cycles...hard for any indice sector to go much higher than 3-4 bagger indice returns imho - without the elephants racing for the exits at the first sign of a double-top exhaustion... and that is exactly what is occuring presently... exhaustion at double-top levels... |
