Gold vs. The Dow.

From Chart of the Day.com:

"For some perspective on the long-term performance of the stock market, today's chart presents the Dow priced in another global currency -- gold. Today's chart illustrates how it currently takes approximately 13 ounces of gold to 'buy the Dow' (i.e. the Dow / gold ratio) -- well off the 44.8 ounces it took back at its peak in 1999. Priced in gold, the Dow had been in a massive 13-year bear market. However, back in the summer of 2011, gold peaked while the Dow continued to rally. While the Dow (priced in gold) is currently well-off its dot-com record highs, it has been surging as of late. The current rally has resulted in a break above resistance of its latest downtrend channel as well as new post-financial crisis highs."

My thoughts:  Gold-once the darling of the investment world during the worst days of the crisis-has really lost it's luster {See here at the Financial Times}.  People forget though that gold is for most people used as a hedge.  When it comes to hedging and diversification the article notes that the difficulty with buying things for diversification purposes is that often when one thing goes up the other goes down.  That's the often times zero nature of diversification.  Hopefully over the long run diversification, when pared with a client's unique risk/reward criteria, gives the client looked for risk adjusted returns. 

Link:  Chart of the Day:  Gold and the Dow.

*Long ETFs related to Gold and the Dow Jones Industrial Average in certain client accounts.

Posting note:  I will not be posting on Monday as I have to be out.  Expect some new and different things coming in the weeks ahead!