The stock market shrugged off the malaise of the early year under-performance that when stock prices fell about 7% in the January - April period. The S&P 500 Index is used in this post for the stock market comparisons.
Aside from the early April short-lived Trump tariff tantrum as some called it, the event was a non-starter for the bears, as stocks recovered quickly. April showed a mere 1% loss. Then May thru August strung together a big rally as prices rose all 4 months; a total of +16% ! The average (mean) gain for this period the past 5 years (2021-2025) was +8.9%, a full 7% lower than 2025.
Our model portfolio that we track each month since 2018 is also 'holding its own' against the stock market. Each month it holds cash/bonds, stocks, and Gold/Silver investments in varying allocations, so it won't match the stock market normally in rising markets - but it won't fall as much in ugly bear markets. Year-to-date thru August, our model is ahead +8.5%, vs the stock market's +9.8%.
Our September model holdings include Technology, Industrials and Communications stocks in the form of exchange-traded funds, or ETF's for short, which are baskets of stocks that hold many positions in those sectors. We also hold 15% in cash earning about 4%, and 20% in Gold/Silver. Silver and Gold were about even in July, then shot up last month +7% and +5% respectively. We like Sprott Physical Gold and Silver Trust, ticker CEF, which holds 70% in gold bullion, and 30% in silver bars. The shares trade on the New York Stock Exchange and the Toronto Canada stock exchange. You could Buy GLD and SLV as alternative separate investments if you want a pure play in Gold or Silver, respectively. With such diversification, a portfolio mix like this is suitable for most investors.
My 10 Bagger in Gold
A 10-bagger is an investment that has increased 10 times, or +900%. They are somewhat rare, and actually finding one and realizing that gain is difficult. I'll say that either you're taking tremendous risks and are very lucky, or you are a long-term investor, which reduces your chance of failure a lot. Some popular stocks that have been 10-baggers, and the time to reach that status as of today's pricing: Apple, 9 years; Tesla, 6 years, Microsoft, 10 years, Meta (Facebook); 11 years. Mutual Funds are familiar to us all as a way to diversify your risks of owning stocks. Most mutual funds buy and sell stocks, and have turnover of 40-50-60% each year. That's a difficult way to get a 10-bagger as their ownership is a short period of time in mutual funds. Individual stocks have the greatest chance of a 10-bagger; but the ride can be harrowing along the way.
My Dad was a silver bullion dealer in the mid-1970's in addition to his money management business started in 1973. He bought a couple hundred ounces of silver bars and 1 ounce round coins for his personal stash; I have a few of them still. He gifted my children some silver bars in the 1990's after their births; about $500.00 each then. I got tired of moving the bars around and storing them in safekeeping. I decided to trade the silver bars for 3 ounces of Gold in 1997. I paid $358 an ounce for 3 'rounds' of South African 1 ounce Krugerrands. Here's two of them.
GOLD $358 to $3,640 today, up 10 times
Silver $4.87 to $41.00 today, up 8.4 times
Since Gold and Silver pay no interest or dividends, they are at a disadvantage to owning a stock or a bond which do pay interest and dividends.
So what did stocks do over that 28+ year time-frame? They did outperform after including dividends payments added to the mix.
The S&P 500 Index rose 14.8 times during that time; quite a bit more as you held 100% stocks, collecting dividends along the way. That was enough for a +10% average gains per year; Gold's was +8.5% and Silver +7.8%. Important point; both stocks and Gold have experienced sizable bear (down markets); Gold prices declined in 9 of the 28 years; 1/3rd of the time, while stocks had losses in 7 years, 25% of the time.
So the lesson here after all this number crunching? Be an owner of stocks and Gold/Silver if you want to grow your estate and investments over long periods of time, and have some cash on hand if an opportunity presents itself. If the 8.5% rise in Gold continues, the next 10-bagger would occur in 28 years; year 2053 at $36,500. President Nixon took America off the Gold standard in 1971. The $35/ounce Gold to Dollar convertiblilty ended; and Gold skyrocketed. Fast forward to my 1997 Gold buy, 26 years later at $358, and that's a 10-bagger. I think I see a pattern here.
Hopefully some of you reading this can then share my story, and yours with your children and/or grand-children some day.
Thanks for reading; pass it along if you found this helpful.
~Barry
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