Foreign stocks involve an element of currency risk, plus they currently have higher P/E ratios than the US market. Gold is a purely speculative asset - it throws off no interest or dividends. People pile on if they think it's moving up, but they also pile off if they think the momentum is reversing. In the late 70's, gold hit a high of $800. It then went on a two decade slide that saw it hit $250. It is now at $1200. This is the kind of roller coaster move that leads gold to be characterized as high risk. While the value will never go to zero, you can lose a great deal of money if you buy at the high, and end up having to sell at a loss a short time later, or holding the asset for decades while other assets skyrocket.
It's different this time. Gold will never ever again trade below $1000 per ounce. I read it on the Interwebz so I know it's true.
ok - there is a currency risk on foreign stocks and there is no divident on gold leaving the rest a subject for speculations.
But making decisions based on risk assesment is always about alternatives.
If you invested in stocks of international companies the sell products for a price they can more or less dictate (pharmaceuticals etc.) there’s a relatively low currency risk in comparison to the other economical risks. I’d rather look at the cash flow per stock ratios of these companies then their P/E.
Also with gold you got something highly speculative but it changes it price mainly because the trust in the green back gets thinner.
In the late 70’s, gold hit a high of $800. It then went on a two decade slide that saw it hit $250. It is now at $1200. This is the kind of roller coaster move that leads gold to be characterized as high risk. While the value will never go to zero, you can lose a great deal of money if you buy at the high, and end up having to sell at a loss a short time later, or holding the asset for decades while other assets skyrocket.
I don’t have the means, but I’d sure love to see an overlay of the two graphs.