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Gold as a Percent of Equities / Fixed Income

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July 01, 2010 – Comments (5)

Another great post by Jake at Econompic.

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Gold as a Percent of Equities / Fixed Income
by Jake
Thursday, July 1, 2010

http://econompicdata.blogspot.com/2010/07/gold-as-percent-of-equities-fixed.html

Paul Kedrosky's Infectious Greed with the post Gold is Way Under-owned Compared to Other Times When the World Sucked:

         Thought-provoking table from Cembalest at JP Morgan comparing gold’s capitalization as a percentage of bond and equity market capitalization  during other periods of market nihilism/strife/awfulness/madness.

The table is recreated in chart form below to show the relative holdings (in percent) by market cap ($) between equities, fixed income, and gold globally in 1982 and at the end of 2009.



Interesting to note that along with gold being held at a much lower percent in market cap terms, but the level of debt outstanding relative to equities and gold is right about where it was in 1982.

5 Comments – Post Your Own

#1) On July 01, 2010 at 11:24 AM, outoffocus (22.75) wrote:

Both gold AND the dollar is down today? WTH?!? Gold is down over $20 and falling, and the dollar is down almost 1.5%!  What did I miss? Oil is down over $3 per bbl.

Must be Cramer's fault. He said the other day on the Today show that we are not heading for a double dip and the market is safe.  He's probably like the most famous contrarian indicator I know.

But seriously, what's causing the across the board selloff?

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#2) On July 01, 2010 at 11:57 AM, binve (< 20) wrote:

outoffocus ,

Just lots of fear and uncertainty. It is interesting to note that gold is not selling off as hard. But I don't think a gold rally is out of the cards in the next few weeks...

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#3) On July 01, 2010 at 12:01 PM, MegaEurope (< 20) wrote:

Not surprising that stocks make up a greater percentage of investment capitalization, since they perform better over the long term than bonds or gold. Expect this trend to continue for the next 200 years.

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#4) On July 01, 2010 at 12:10 PM, outoffocus (22.75) wrote:

 It is interesting to note that gold is not selling off as hard.

Gold hasn't been recently but today it is.  Gold currently @ $1217.  Down over $28.  Its not that I'm worried about gold. Just kinda shocked at the price action today. PM stocks are down big time. Looks like another good "buy the dips" day.

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#5) On July 01, 2010 at 12:14 PM, binve (< 20) wrote:

MegaEurope ,

Nice chart

outoffocus ,

I agree it is today, just remarking how it has been holding up recently.

>>Looks like another good "buy the dips" day.

:)..

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