Suddenly Gold Isn't Looking So Solid - 05/15/11- Aaron Skloff, AIF, CFA, MBA - CEO Skloff Financial Group

“Suddenly, Gold Isn’t Looking So Solid” - The New York Times, 05/15/11 “A bar of gold is just a bar of gold,” he said in a telephone interview last week. “It doesn’t do anything. There’s a market for it, sure, just as there is for, say, a work of fine art, and if you buy and sell at the right price, you’ll make a profit. But if there’s no cash flow, no dividend, no earnings, how do you calculate its intrinsic worth?” Answer: “You can’t. It’s not that kind of an asset.” In the 1980s and ’90s, Mr. Brinson did path- breaking research on the effects of asset allocation on portfolios. In two papers in the Financial Analysts Journal, he and several colleagues found that broad decisions about asset classes — which to hold and in which proportions — accounted for more than 90 percent of a portfolio’s performance. Of course, it’s much easier to discern trends after the fact, and on that score the picture for gold isn’t entirely attractive. It peaked in price in 1980 at $850In a strict sense, commodities may not even be an investment asset class, because they don’t a troy ounce. Factor in inflation, and that comes toproduce any cash flow or earnings or dividends. That’s the view of Gary P. Brinson, a more than $2,400. After more than 30 years, inscholar and veteran strategist based in Chicago. other words, an investor in gold would still be operating at a loss, without even counting the cost of storing and protecting the gold. www.skloff.com

Suddenly Gold Isn't Looking So Solid - 05/15/11- Aaron Skloff, AIF, CFA, MBA - CEO Skloff Financial Group

by Aaron Skloff, AIF, CFA, MBA on May 15, 2011

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Suddenly Gold Isn’t Looking So Solid - 05/15/11- Aaron Skloff, AIF, CFA, MBA - CEO Skloff Financial Group — Presentation Transcript