Kramer wrote: Hi Petey,
The Bernstein article refers to prior research (via a link at the beginning) that covers a shorter period, from 1969-1996 or so. For an asset class with such a high standard deviation, and that is so influenced indirectly by governmental decisions with respect to the gold standard, it is hard to think about using time scales shorter than that. Yes, that leads to uncertainty about the asset class in general.
I took a 3% allocation. My portfolio has about doubled in the last three years, so it is still 3%, since the value of the Vanguard fund has roughly doubled in that time. When I got religion about owning low cost passively managed asset classes only, I strongly considered selling it, but decided not to because of the capital gains taxes I would have had to pay. The fact that is has steadily gone up, combined with the new lower dividends taxes, makes me happy about my decision not to sell I used the same logic in deciding not to sell my Berkshire Hathaway stock. Those are the only two actively managed funds/stocks I own.
I think you can make a case for inclusion or exclusion from a portfolio. For me, it is really on the bubble as far as investable asset classes go.
Financial Independence/Retire Early -- Learn How!
Thanks for posting, Kramer.