What is going on with Crypto and metals?
8 comments
Crypto -- gold -- these are both assets classes where the price is primarily driven by speculation. Sometimes speculation causes prices to fluctuate up, other times speculation causes prices to fluctuate down. There's inherently no stability. Over the last year, the mass media has been filled with news articles about the gold price so it isn't surprising that a lot of speculators have jumped onto the bandwagon (or have been trying to jump off).
Some asset classes (stock, real estate, bonds) have intrinsic value based on the net present value of their associated future cash flows, independent of whatever price the market currently offers to buy or sell them.
If you're holding a heavy allocation of purely speculative assets and that's causing you to lose sleep, consider selling some and increasing your allocation to assets that have intrinsic value.
The US stock market is probably a bit overpriced at the moment, I'd avoid piling 100% into that. A reasonable split of US stocks and international ex US stocks could be appropriate if you're investing money that you don't need for a decade or more. There are lots of low-fee passively indexed ETFs that can be used to easily and cheaply invest. If you'd like to learn more about simple and practical approaches for long-term investing, not speculation, check out the bogleheads.org website.
"In the short run, the market is a voting machine but in the long run, it is a weighing machine." -- Ben Graham
The voting machine dynamic is speculation. The weighing machine dynamic is anchoring of prices around long-term intrinsic value.
Some asset classes (stock, real estate, bonds) have intrinsic value based on the net present value of their associated future cash flows, independent of whatever price the market currently offers to buy or sell them.
If you're holding a heavy allocation of purely speculative assets and that's causing you to lose sleep, consider selling some and increasing your allocation to assets that have intrinsic value.
The US stock market is probably a bit overpriced at the moment, I'd avoid piling 100% into that. A reasonable split of US stocks and international ex US stocks could be appropriate if you're investing money that you don't need for a decade or more. There are lots of low-fee passively indexed ETFs that can be used to easily and cheaply invest. If you'd like to learn more about simple and practical approaches for long-term investing, not speculation, check out the bogleheads.org website.
"In the short run, the market is a voting machine but in the long run, it is a weighing machine." -- Ben Graham
The voting machine dynamic is speculation. The weighing machine dynamic is anchoring of prices around long-term intrinsic value.
I cannot speak to crypto, but as far as the others go:
Gold is at 4988 today, MAX was 5626... beginning of November it was 4000, so in 3 months up 25%, what do I care about the max it was for 5 seconds.
Silver is at 88 today, MAX was 122... beginning of November it was 48, so in 3 months up 80%, what do I care about the max it was for 5 seconds.
DOJ is at 49500 today, MAX was 5328... beginning of November it was 47500, so in 3 months up 4%, OMG now I am mad! That is only 16% average a year.... With inflation at 3%, a real rate of return is only 13%. I can laugh all the way to the bank on that one.
This is why dollar cost averaging is a critical method.
I was discussing market crashes with a friend. He pointed out that it took like 25 years to recover from the great depression. Which he was correct, if you put ALL of your money in the just a minute before the crash. If you had been doing $100 a month for 2 or 3 years, your recovery was MUCH faster.
Gold is at 4988 today, MAX was 5626... beginning of November it was 4000, so in 3 months up 25%, what do I care about the max it was for 5 seconds.
Silver is at 88 today, MAX was 122... beginning of November it was 48, so in 3 months up 80%, what do I care about the max it was for 5 seconds.
DOJ is at 49500 today, MAX was 5328... beginning of November it was 47500, so in 3 months up 4%, OMG now I am mad! That is only 16% average a year.... With inflation at 3%, a real rate of return is only 13%. I can laugh all the way to the bank on that one.
This is why dollar cost averaging is a critical method.
I was discussing market crashes with a friend. He pointed out that it took like 25 years to recover from the great depression. Which he was correct, if you put ALL of your money in the just a minute before the crash. If you had been doing $100 a month for 2 or 3 years, your recovery was MUCH faster.
>This is why dollar cost averaging is a critical method.
"Time IN the market beats timING the market."
"Time IN the market beats timING the market."
If you have a portfolio with some % allocation across various assets and industries (a% stocks, b% bonds, c% precious metals, d% bitcoin, etc.) then you can simply rebalance at regular intervals. When precious metals become overweighted in your portfolio you sell out and buy into whichever asset class is underweighted. This enforces "buy low, sell high", and if you do it on a predefined interval you don't have to worry about day to day fluctuations.
Good points all around. I’m not modeling against a single extreme scenario like hyperinflation or world war. It’s more about general uncertainty and how many assets that are usually considered “safe” seem increasingly driven by speculation and sentiment.
I agree that long-term investing, diversification, and strategies like DCA matter far more than trying to time peaks or react to headlines. I’m mostly interested in how others balance psychological comfort with rational allocation during periods like this, when narratives feel louder than fundamentals.
I agree that long-term investing, diversification, and strategies like DCA matter far more than trying to time peaks or react to headlines. I’m mostly interested in how others balance psychological comfort with rational allocation during periods like this, when narratives feel louder than fundamentals.
Which specific threat are you modeling against? A crash? A world war? Hyperinflation? A tyrannical government?
The volatility in crypto, combined with uncertainty in traditional “safe haven” assets like gold, makes it hard to understand where real stability is right now. It feels like every option carries a different kind of risk.
I’m curious how others see this moment — are you staying invested, reducing exposure, or shifting into something else entirely? I’m a bit scared that a war might be coming