<p>Ok, dadx3…thank you.</p>
<p>I think cash is in a different category than other diversifiers; you are not hoping that it will go up to offset losses in other investments, particularly in our current zero interest rate environment.</p>
<p>After dstark’s comments, I checked and TLT is a true diversifier (a -.66 correlation with SPY). Gold is an interesting case. While it is at about .5 correlation with stocks over the past six months (still significantly less than IYR), gold’s true value value as a diversifier comes when the market is in crash mode. For example, unless you start fooling around with crazy stuff like VXX, it was just about the only thing gave some protection in 2008.</p>
<p>Uh, gold returned nothing from 1980 for the next 35 years.</p>
<p>Buying gold now, is “buying high” (as in “buy high, sell low”). It’s way up over the last 6 years, but, boy, that’s one investment that did nothing for decades.</p>
<p>EMM1, </p>
<p>How did you calculate the correlation?</p>
<p>Over what time period?
Check out the correlation since March 2009.</p>
<p>You know? There are things more important than correlations. Like what you can actually make by investing in something. </p>
<p>Does a return of 2.7+ Percent a year for 17 years appeal to you?
Maybe it does…</p>
<p>The date you use to figure out correlations, and the date you use to figure out long term returns can affect the numbers you churn out.</p>
<p>Dadinator is right about gold’s history for 35 years.</p>
<p>With due respect, I think you are missing the point. The idea is to have gold as part of a diversified portfolio. Gold did indeed do poorly from 1981 through 1992, but the permanent portfolio as a whole did just fine. Conversely, stocks have gone nowhere for the past dozen or so years, but the portfolio as a whole has been lifted by the outperformance of gold.</p>
<p>If you believe that you have strong insights into the directions of the market, go for it. You’re a better man than I am. I do best when I stick with mechanical strategies.</p>
<p>BTW, this was posted before dstark’s post.</p>
<p>What are the correlations between gold, stocks and bonds since March 2009?</p>
<p>I put all my extra money in 1969-1973 Porsche 911S models. Bought 1990-2001 around $10K each avg. Current values avg $90K+ each and climbing. Fun factor-10. ;-)</p>
<p>That’s nice, Barrons. :)</p>
<p>I call them alternative investment vehicles. But that dog Alfa Romeo GTV–should have bought another 911 but wanted to diversify. Big mistake.</p>
<p><a href=“http://www.autoweek.com/article/20110820/carnews/110829999[/url]”>http://www.autoweek.com/article/20110820/carnews/110829999</a></p>
<p>I like the look of the 911s.</p>
<p>barrons, seriously? How many do you own? Do you store them? I have several saved searches on Ebay for 911s. I am most interested in a mid 80s model to use as a fun driver. Looks like a nice one is attainable for mid teens… but it is unlikely to happen because we already have 3 cars and only a 2 car garage and if I buy a Porsche I would have to sell my 68 corvette. 
Decisions decisions… so I just continue to monitor the ebay auctions…</p>
<p>Barrons, I’m curious about the repair and maintenance costs of your vehicles.</p>
<p>Three early 911s. I don’t drive them much (1000 mi each maybe) so maint is about $100/yr. I keep them in my garages. If you drive them 5000 mi a year figure $500 maint. Classic car insurance is pretty cheap too with limited use. About $250 ea.</p>
<p>Best models to buy now for <cheap> would be 80’s 911SC or Carerra. For “investment” I really like the 76-79 911 Turbo. Getting very hard to find but were selling in the high 20’s for a decent one. If you find a clean untampered one under 30 buy it now.</cheap></p>