Gold

Gold's allure might be irrational, but for centuries the metal called as "barbarous relic" has had mystic hold on the human imagination.

"Gold is the child of Zeus; neither moth nor rust devourth it" Pindar wrote in fourth century BC Fittingly, gold dissolves only in cyanide.

Lately there is lot of buzz over sensex performance, So I was wondering if someone wants to invest in non-equity instruments then what ? What comes to my mind first is Real Estate and probably Gold. So the first question that pops up is that how the investment in these instruments different from stock market, do they have the same risk, do they have the same liquidity, etc ? I don't know.

So I decided to look at the figures, everytime I am in a fix, I always try to look at some pertinent data......more the data better for me, unfortunately data is always insufficient at-least for me :) Anyhow, for Real Estate I wasn't able to find enough data, so I decided to look at GOLD. And came up with a theory which can be inferred from the graph below...... START SAVING MONEY.

I guess the graph is self explanatory (thats one of the reasons why I like graphs :) )


Note : This is a theory that I have made considering the US stock market (and neglecting many other nitty gritty details of US stock market, due to lack of sufficient data with me. I would have liked to have a detailed chart for Dow, S&P or Nasdaq but since I wasn't able to get one, I just tried to look at one aspect ie the great crashes in US history.
Also note that after every crash there is an upward correction in gold prices.