Why do commercial investment advisers always tell you that gold (& silver) and PM assets are all massively risky? Here's the one chart that explains why.
Viewing the chart above, a six-year old child could tell you that investing in physical gold and gold mining stocks (as indicated by the AMEX HUI gold bugs index) yielded returns from 2001 to 2012 far superior to the returns of the US S&P 500 Index over the same time period. In fact, the truth of this statement is so self-evident, that if this same child was asked what asset classes he should have been invested in over the past decade by viewing the above chart, the simplicity of that question might lead him to think that one is asking a trick question. So why is it that all the leading Wall Street investment firms stated during the visible onset of the global financial crisis in 2008 (versus the real onset of the global financial crisis quite a few years earlier) that gold was one of the riskiest assets in which one could possible invest? The simple answer, of course, is that if they were the ones involved in the scam to take gold and silver prices down back then, then certainly they would not tell you that the steep, rapid (but short-lived) drop in gold/silver prices was a massive buying opportunity. However, if a six-year old can see what is so obvious, then why should a man of Warren Buffet’s prominence continue to slander gold and why does his right-hand man, Charlie Munger, make idiotic statements like“gold is a great thing to sew in your garments if you’re a Jewish family in 1939” but not to own, instead of just stating the truth that “physical gold (and physical silver) was one of the best assets to build wealth since 2001”? And if a six-year old can look at the above chart and immediately know that he or she should have beeen invested in gold and gold assets, why, according to the World Gold Council, is still only 1%, or $146 billion of the $146 trillion investable global assets, invested in gold, and 9.1% invested in money markets, 48.7% in fixed income, 37.2% in equities and 4.0% in alternative investments? (though these most recent statistics are from the end of 2010, it is doubtful that these statistics have changed much in the past two years.)