piezoe
Registered: Jan 2006
Posts: 4928 |
02-10-12 03:25 PM
Quote from sumfuka:
I still prefer gold over stocks. Reason being it is one of the few things that could be manipulated. And you don't have to worry about time decay. Currencies used to be good but in this day and age, who is to say that particular currency won't collapse. Nations are crumbling right before our eyes.
So Buffett can keep compounding on his stocks, and I'll keep compounding on the metals. Everyone wins. 
you're deluding yourself. Mr. Buffett is correct. You should read the article again and learn to think in terms of purchasing power. Wall street hype and markets are always reported in nominal dollars, you must think in terms of purchasing power to be able to invest wisely.
For example, when you discount the S&P for inflation you find the that the total return since the mid seventies is, if you omit dividends, roughly that of Treasuries with of course greater risk. However, if you include dividends, you now get a return a little better than inflation. Over longer periods, gold keeps you roughly even with inflation, and bonds lose to inflation.
The key to long term investing is dividends, or value investing as someone else has pointed out. I prefer the dividend route and only consider, for long term investing, stocks in a long term up trend with a history of raising dividends. I will buy nothing but stocks that pay dividends.
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