Using historical data to invest into the future is a very dangerous investment guideline. If investment is that simple, then historians and librarians would be the richest people in the world by now

When you make a statement that "gold historically returns around the rate of inflation", it gives a false impression that gold price always go up. But in actual fact, historical gold price went up and down, depending on which period you are referring to. If you talk about from the 1980s to early 2000s, it hovers around US$300-US400 without much changes. That is practically 20+ years without inflation !

Can you show me how do you calculate the "rolling 5-year hold" which gives you a return of 7% ? I still can't figure out without a timeframe, you can come out with a meaningful number. I will bet that your 7% is cherry picking too

Have you notice those responsible banks and financial institutions selling their products always put a warning clause "the value of investment may go up as well as down, and that past performance is not indicative of future performance" ? They do use the past performance to attract customers, but they also very clearly and specifically warn their customers the danger of relying on past data

Using a PC helps a lot in editing and quoting, compare to using phone and tablet. But it's ok, I can read what you wrote

email me at robin@hellogold.com and i will send you the raw data

Is it very difficult to explain in a post ? You must have done some calculation on the raw data to come to the 7% conclusion right ?

Or you have not calculated the “raw data” and wants me to help ?

Here is the 5 year rolling return for gold price from 1980 to 2017. I used the yearly numbers instead of the monthly numbers. Over 38 years, a yearly rolling returns should be good enough an indication vs the monthly rolling returns to gauge the historical return of gold investment.

The source of data are from :

http://onlygold.com/Info/Historical-Gold-Prices.asp
http://www.canadianforex.ca/forex-tools/hi...y-average-rates
https://fred.stlouisfed.org/series/DEXMAUS


US$ Gold Price

US$ 5 year
Year Gold price rolling return

1980 594.90
1981 400.00
1982 447.00
1983 380.00
1984 308.00
1985 327.00 - 11.28%
1986 390.90 - 0.46%
1987 486.50 + 1.71%
1988 410.15 + 1.54%
1989 401.00 + 5.42%
1990 386.20 + 3.38%
1991 353.15 - 2.01%
1992 333.00 - 7.30%
1993 391.75 - 0.91%
1994 383.25 - 0.90%
1995 387.00 + 0.04%
1996 369.00 + 0.88%
1997 287.05 - 2.93%
1998 288.70 - 5.92%
1999 290.25 - 5.41%
2000 272.65 - 6.77%
2001 276.50 - 5.61%
2002 342.75 + 3.61%
2003 417.25 + 7.64%
2004 435.60 + 8.46%
2005 513.00 +13.48%
2006 635.70 +18.12%
2007 836.50 +19.54%
2008 869.75 +15.82%
2009 1,087.50 +20.08%
2010 1,420.25 +22.59%
2011 1,531.00 +19.22%
2012 1,664.00 +14.75%
2013 1,204.50 + 6.73%
2014 1,199.25 + 1.98%
2015 1,060.00 - 5.68%
2016 1,128.80 - 5.93%
2017 1,284.01 - 5.05%


RM Gold Price

RM 5 year
Year Gold price rolling return

1980 1,320.68
1981 896.80
1982 1,038.16
1983 887.30
1984 748.13
1985 791.34 - 9.74%
1986 1,015.95 + 2.53%
1987 1,210.90 + 3.13%
1988 1,111.51 + 4.61%
1989 1,083.10 + 7.68%
1990 1,044.62 + 5.71%
1991 971.26 - 0.90%
1992 847.90 - 6.88%
1993 1,008.29 - 1.93%
1994 1,005.53 - 1.84%
1995 970.34 - 1.46%
1996 928.20 - 0.90%
1997 808.70 - 0.94%
1998 1,133.25 + 2.36%
1999 1,102.94 + 1.87%
2000 1,036.10 + 1.32%
2001 1,050.84 + 2.51%
2002 1,302.35 +10.00%
2003 1,585.40 + 6.95%
2004 1,648.25 + 8.37%
2005 1,942.80 +13.40%
2006 2,331.15 +17.28%
2007 2,877.45 +17.18%
2008 2,897.01 +12.81%
2009 3,818.83 +18.30%
2010 4,573.83 +18.68%
2011 4,682.62 +14.97%
2012 5,137.70 +12.29%
2013 3,793.85 + 5.54%
2014 3,924.98 + 0.55%
2015 4,141.38 - 1.97%
2016 4,678.12 - 0.02%
2017 5,584.62 + 1.68%


As we can see above, gold investment returns over the years fluctuate greatly. With a range of -11% to +23% (in US$) and -10% to +19% (in RM)

Gold prices, as in other investment, fluctuate over time. If we look at gold price in 1980 and gold price in 2005 :

1980 US$594
2005 US$513

Over the 25 years, gold price did not go up but stagnant/decreased. So during this period, there is no "inflation" in gold price over a prolonged period

However, since 2005 :

2005 US$513
2012 US$1664

Over the 7 years, gold reached its peak, and from 2012, it has retreated back to US$1200-1300 now

robincflee do show us how you get a rolling 5 year return of 7% without cherry picking the period ?

This post has been edited by Showtime747: Sep 29 2017, 11:10 AM

Apologies. We are in the middle of our token sale and i am focused on this exercise at the moment. Can you pls email me and I will send you the data and show you how we did our calculations

We don’t sell maple leaf gold coins. We only use PAMP bars and we buy 1kg at a time. When our customers opt to have physical redemption, we convert their fractional ownership of the 1kg into the appropriate size and give them the gold bar for that value

No problem, we can wait for your explanation here. It’s better to hear from the horse’s mouth

I have calculated using the data I retrieved from the sources. It shouldn’t be much difference from your raw data. I have used the ordinary definition of “5 year rolling returns” to come out with the calculation

In the meantime if you can just comment on your methodology ?

What he means is if your request is lesser than 1kg worth of gold, they will get hold of a smaller gold bar for you

Eg. Let’s say you invested RM20000 in HelloGold and now you want to withdraw. You don’t want money, but gold bar.. They will give you a 100g 99.99% gold bar (assuming now price is RM200 per gram). They don’t melt their 1kg bar, but buy from market the 100g and give it to you. Of course, they will deduct any cost of physical gold delivery instead of Ringgit

Their platform concentrate of selling small fractional portion of gold in RM using mobile apps. They are not those shops selling gold coin or bar. But if you still insist to withdraw in gold bar, they still can do it.

You should go to shops like Nubex if you are after physical gold

HelloGold enables our customer to buy gold at spot no matter how small the value - our minimum transaction size is RM1. We are able to do this because we buy 1kg bars each time. We sell our customer fractional ownership of these bars at the prevailing spot price. And when they want to sell, we buy the gold at the prevailing price at that time. Some customers choose to take physical redemption of gold rather than cash. For these customers, we help them to convert their fractional ownership of the 1kg bar to the nearest whole gram eg 2 x 1g coins if they only have 3 or 4 g of gold

I will give you the theoretical quote on Monday when our office opens

He is busying on ICO

ya, he is just pusing u around

Cool. You do you know about the kijang emas? Long time ago I was going to invest into this Kijang emas but I did deep calculation and found that the return is not that attractive after take in the spread cost. So I did not invest further.

This HelloGold with 2% buy and sell charge - Lagi teruk lo

Hi there

I was in Singapore on Monday and had too many meetings to get my team to get the quote.

Anyway, here it is

the cost of 100g is RM17,915.60

to get it delivered to your address, we would charge the following - shipping RM107.27 and insurance RM53.76 - an additional of RM161.03

by way of comparison, you can look at
https://publicgold.com.my
http://powergold2u.com
https://www.nubex.my/index.php/bullion/gold...ght=4038%2C4041

Yes. we are closing our token sale this week. and my focus is on making sure the tokens are ready for listing for our supporters

Your numbers look correct. Based on that data set, some conclusions are:
1. average CAGR over the entire period = 5.2%
2. average 5-year return = 33.6%
3. average rolling CAGR if you hold for any 5 years = 5.0%
4. if you held for 5 years over the time period, you would have made a positive return 70% of the time

Our analysis was done based on numbers from www.oanda.com/currency/historical-rates/. Some conclusions from our analysis were:
1. average CAGR over the entire period = 8.1%
2. average 5-year return = 63.3%
3. average rolling CAGR if you hold for any 5 year = 9.5%
4. if you hold for 5 years over the time period, you would have made a positive return 97% of the time

The 2 analyses are slightly different as:
1. Our sources provide different currency rates
2. We use monthly gold prices instead of annual
3. Our data set goes back to 1995 instead of 1980

Robin,

Looks to me you are AVERAGING the “5 year rolling return”

I think we should first establish why we need “5 year rolling returns” vs “average return”.

Average return is not a reliable indicator as opposed to 5 year rolling return

Maybe this explanation is useful :

Now, it looks to me you are AVERAGING the 5 year rolling return. Your numbers become chapalang by mixing the “average” to “5 year rolling return”. You have defeated the purpose of having a “5 year rolling return” which in the first place is formulated to overcome the shortcoming of “average return”

Just curious, which field are you from ?

Your original statement was “5 year rolling return = 7%”. You also claim this to be “inflation”

Apparently your numbers is more like “average blocks of 5 years return over 2 decades” to get your 7%.

Your original statement is therefore inaccurate. People may thought that given any 5 years period, he would make a return of 7% pa. But in fact, what you meant was “if you hold the investment for 2 decades, the average returns for the block of 5 years period is 7% pa”.

There is a huge difference for investment returns over a 5 year horizon vs 20 years horizon

And the 7% has got nothing to do with inflation as well. Inflation gives an impression that prices will always go up. In the case of gold, that is far from it

Your numbers start from 1995 to 2017, my numbers starts from 1980 to 2017.

Both have different results.

What if I pick only 1980 to 2005 ? The result of gold investment will look real bad. Yes, I am cherry picking.

But if your numbers are derived from 1995 to 2017, you are cheery picking as well. Both of us are cherry picking

Why not just pick the most recent 5 years ? The numbers do not look good either.

At the end of the day, all investment return calculation must be based on certain period. You can’t calculate without a period. So sales people will cherry pick the best period to their advantage

That’s where rolling returns provides clearer pictures for an investment, with a range of return outcome over the selected period (still cherry picking), but a better picture over time

In the case of gold, the 5 years rolling returns ranges from -11% to +23% over 2-3 decades. That is the true picture of gold investment instead of a sweeping statement of 7% that doesn’t depict the true risk and return profile of gold investment




Having talked about the past data, ultimately it is only a guide. It doesn’t necessarily provide a good guidance for future performance. It is always good that you include the statement like “historical returns are just an indication of past performance, but do not necessarily provide similar returns in the future” or something to the effect.

I don’t oppose to sales people’s cherry picking numbers and use historical data to support the sales pitch. But at least explain the assumptions you use and warn them of the risk of losing money