KISS, the acronym, keep it simple stupid, applies to investing.  

Stocks versus gold, is the latter a better investment over a long-term and short-term time frame?

Maybe outperforming the index, being an alpha investor without taking huge risks with capital, is as straightforward as storing savings in gold and holding it over the longer term.

KISS - keep it simple stupid

“Stocks versus gold, is the latter a better investment over a long-term and short-term time frame?”

WIN INVESTING

KISS thinking applied

Want to rattle your bank manager? 

Several years ago, when gold was trading near 1,500 USD, we  proposed to take out a loan using physical gold bars as collateral to secure the loan in the event of a default. 

We figured that monetary madness and fiscal recklessness are great bed partners that would make cash trash, so investing in gold longer-term would eventually lead to gold appreciating against the USD.

All we  had to do was keep up with interest payments, near zero at the time and let “laissez-faire” do its thing. The Great 2020 Lockdowns, more madness, shutting down the global economy, and creating copious amounts of currency crashed the treasury bond market in 2023 and bankrupted five banks, resulting in at least a 40% return on the loan gold deal when factoring in interest payments and penalties for settling loans in advance. 

Investment pundits at the time were peddling treasury bonds with yields around 3% as a no-brainer safe haven investment because inflation was temporary, transitory, and then sticky.  

“We figured that monetary madness and fiscal recklessness are great bed partners that would make cash trash, so investing in gold longer-term would eventually lead to gold appreciating against the USD”

WIN INVESTING

What happened to KISS thinking? 

If you create copious amounts of currency and shut down the global economy, more cash chasing fewer goods equals higher prices.               

After days of considering the deal, the bank rejected my proposal. Maybe they got it that cash is trash, and my profit would be their loss.  

“An unclimbable wall of worry is bullish for gold, the ultimate safe haven asset” – Win Investing

Gold versus stocks, KISS still applies

An unclimbable wall of worry is bullish for gold, the ultimate safe haven asset. We remember Darren Winters writing, as inflation worsens, the global wars on multiple fronts escalate, which is policy-driven. 

Rising treasury bond yields, which impact the cost of medium long-term loans, could be halted if monetary policymakers decide to ramp up their bond buying, QE to suppress bond yields.

The Ukraine war would not have started if a diplomacy of mutual respect was followed, rather than war. Moreover, when Russia invaded Ukraine, the war would have been over in weeks or months, if Western arms were not supplied in the conflict. In the Middle East, an Israeli air strike on the Iranian Consulate is accelerating war in the region.  

So a piece in Visual Capital, entitled “Gold vs. S&P 500: Which Has Grown More Over Five Years?” compares the performance of gold over stocks long term and short term. 

Gold is up 16.35%, S&P 500 is up 25.21% over a year. Over 5 years, gold is up 81.65% and 76.22%.

KISS, if a policy of war and spending continues, gold could keep outperforming. War makes gold rally and not treasury bonds and that is an anomaly today.   

Win Investing - Newsletter signup logo

Want the latest investor news as it happens?

Subscribe to our Investors Newsletter

You have Successfully Subscribed!

Pin It on Pinterest

Share This

Share This

Share this post with your friends!