The stock market has had a rough decade, and looks to be headed for more bad times.  Here is yet another bad sign for people counting on the stock market to get them to a comfortable retirement:  

From MarketWatch (hat tip Stacy McCain): 

 Gold futures closed at a record high on Thursday, handily surpassing the mark reached just last week as investors grew more concerned about the U.S. economy and its proxy, the stock market.

Gold for August delivery, the most active contract, added $18.20, or 1.5%, to settle at $1,248.70 an ounce on the Comex division of the New York Mercantile Exchange. That left the June 8 record close of $1,245.60 in the rearview mirror. . . . 

“Equities are in a precarious situation,” said Charles Nedoss, a senior market strategist with Olympus Futures in Chicago. Investors feel stocks may be overbought and turned to the safety of gold, he added.  

Or, to here the Financial Post tell it, US$3,000 gold gets you a 5,000-point Dow:  

While David Rosenberg, chief economist at Gluskin Sheff, has made no secret of his “conservative” view that gold will hit US$3,000 an ounce in the next few years, Tuesday he made a bold prediction for the Dow Jones Industrial Average: if gold were to reach that level, the index would fall to a trough of 5,000 points.

 In his Tuesday morning report, Mr. Rosenberg plugged the value of gold versus the level of the Dow Jones over a period stretching from 1900 to the present day, and found two historical low points: just after 1930, and 1980.

 The current decline in markets coupled with the run-up in gold is approaching the same nadir, but is not quite there yet.  

“If this ratio ends up retesting the two fundamental lows that it has achieved in the past … what we would be talking about here is a Dow 5,000 trough at some point down the road,” he said.  

For point of reference, at mid-day the Dow was up about 110 points to 10,300 while gold was moving at US$1,233 an ounce.  

What is a smart real estate investor to do?  

Do lots of research, make up your own mind, and invest in things you understand

 (photo credit Tao Zhyn)

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