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Originally Posted by SteveSouthwood
Not at all. You were the one that said the only thing that you couldn't buy more of was real estate, stocks and labor. The converse of this is to say that stocks, houses and labour outperformed cash over the same period. Do you disagree with my logic?
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Now I have no idea what you are saying - I just told you, I did not say that stocks, houses, and labor were not better investments over that period of time, what more do you want me to say ?
I mean so what, that doesn't have anything to do with the fact that $us was a great investment over that time. Is every investment only a good investment if it outperforms everything else ? If so I have some sad news for you, a lot of things outperformed the U.S. stock market over the same period of time. In fact, buying stocks over the past 2 years has been a terrible choice. Yes, owning stocks outperformed having $us in your pocket over the past 2 years, but I'm sorry to report that you would have had to have earned 30% over that time period to even break even in the big scheme of things. If you didn't make 30% on your money over the past 2 years, you lost money because of a declining $us. Owning silver was a much better investment over the past 2 years than owning the index, and so were a lot of other things. Does that make owning stocks wrong ? No, of course not. And the fact that stocks outperformed $us over a certain period of time doesn't make cash a bad investment, it just wasn't quite as good of an investment over that period of time. But $us cash over the period of the 90's into 2000's was a pretty good investment, that's why so many foreign governments and companies invested so heavily in it.
Quote:
Originally Posted by SteveSouthwood
You are absolutely right that with the benefit of hindsight you can always point out which of all the possible assets (including cash) would have been the best to hold onto over a given time period. But that doesn't help us know what's the right thing to hold onto today. That's why you have to look at your savings in terms of buckets of different mixes of assets and look at each bucket over different time horizons.
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Obviously. As far as "doesn't help us know what's the right thing to hold onto today", well who cares, that wasn't the point I was making with my post, that's the point you are trying to make.
My point was refuting your statement that holding cash was always a bad idea, that's what you said earlier when you said "you win compared to cash in the mattress earning zero growth.". Cash is the right thing to have sometimes, bonds are not always better, and cash is never "earning zero growth", it is always gaining and losing value compared to everything else in the Universe. It only has "zero growth" to people who can't think beyond investments that are denominated in $us. Cash has had some great moments compared to real estate and stocks even during this incredible 2 decade long bull market in equities, last week was a great time to own cash, I'm sure there are a lot of mortgage fund managers who wish they had a whole lot more of it.