Gold Forecast Versus Real Estate Forecast

An important question all investors must ask:

Which asset class has performed the best during the past 42 years?

Answer: Gold Price Performance Leaves Other Assets Dead In The Water Since 1972   

This begs the question:  What type of performance might investors expect going forward?

This analyst believes future performance will closely mirror the past…to wit:  Gold will far out-perform US Real Estate.  And here are several fundamental reasons for this GOLD Prediction & Real Estate Prediction:

Real Estate Experts Predict US Housing Recovery Is Slowing

http://www.usatoday.com/story/money/business/2014/04/29/housing-recovery-slows/8411483/

http://independencetitle.com/why-the-national-real-estate-recovery-has-slowed-this-year/ 

http://www.latimes.com/business/realestate/la-fi-mo-big-brokerage-predicts-slow-home-sales-20140505-story.html

Reasons Why Gold Is Preferable Investment Over Real Estate

Benefits of Gold:

• No annual property tax
• No annual maintenance costs
• Gold can be sold ounce by ounce, whereas you cannot sell your house room by room
• Gold has daily liquidity as it is bought and sold on exchanges around the world (ie RE has near zero liquidity)
• Gold can travel….obviously your real estate is nailed to the ground where it was ‘born.’
• OH…and did I say Gold’s investment performance during the past 42 years left Real Estate near dead in the water.

Other considerations:

https://www.gold-eagle.com/article/real-estate-boon-or-boom-vs-gold-asset-or-liability

But what about since 2000…Which Gave Better Return?

Since 2000 US Real Estate in 10-major cities appreciated 70%,  equivalent to a Compound Annual Growth Rate (CAGR) 3.86%.  However, during the past 14 years GOLD appreciated 357%...literally 5 times more than US Real Estate (equivalent to a CAGR of 11.04%)

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Cost Of A House In Gold: 

Cost Of A House In Silver: 

(Charts courtesy of  http://www.sharelynx.com/  )

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Real Estate giant predicts slow home sales for months to come:

http://www.latimes.com/business/realestate/la-fi-mo-big-brokerage-predicts-slow-home-sales-20140505-story.html

Housing Starts are way down from the 2006 Peak:

http://www.tradingeconomics.com/united-states/housing-starts

Weak housing market to affect US economy in 2014, warns Fed:

http://www.globalpropertyguide.com/news-Weak_housing_market_to_affect_US_economy_in_2014_warns_Fed-1888

Furthermore,  CNBC’s Senior Commentator Ron Insana recently predicted, “Housing weakness may change the Fed’s game.”

Gold Forecast and US Real Estate Forecast

The following forecasts assume Gold and US Real Estate will continue performing at the same CAGRs they experienced during the past 14 years – to wit:

To better understand the difference of CAGRs, the following example assumes a $100,000 investment in GOLD and in Real Estate for the next 5 and 10 years.

After 5 years:

$100,000 in Real Estate would appreciate to $120,849

$100,000 in GOLD would appreciate to $168,810

After 10 years:

$100,000 in Real Estate would appreciate to $146,044

$100,000 in GOLD would appreciate to $284,967

A related Silver Price Forecast study is Silver Global Price Forecast: The Sterling Opportunity 

Like the AD man on TV emphatically says:   “Where is your money?

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