Year-End Competition 2nd Update

Good Morning Ladies and Gentlemen

Guesses

The book is closed, and no more participants are accepted. The final highest S&P bid came in at 4’482, the final lowest at 1’881. The final highest bid for gold came at 2’350, and the final lowest was at 1’715. For Brent crude oil, the final price estimates range from 160 to 33.63. As always, all prices are USD, not Turkish Lira, McDonald’s burgers or sea shells.

Today’s prices

While I am writing this edition of «Stefan’s weekly», the S&P is trading at 3’771.52, gold at 1’674.90 and Brent crude oil at 91.84.

Predicting the future

To me, predicting the future is pretty hard, if not impossible. Interestingly enough, some of you have seen one or the other price development going in the right direction, and this is what you keep mentioning when writing to me. All fine, I know the feeling. When speaking to my family members, I also tend to highlight past arguments that, in retrospect, turned out to be correct. Now, with this «Stefan’s weekly» and also thanks to the «year-end competition», I would be super happy if I was able to make you a little aware of the difficulties when making predictions. Moreover, I hope for your understanding when we cannot always hit it exactly.

The price of gold

In this regard, Ladies and Gentlemen, I receive one or the other message about the price development in gold once in a while from some of you. I know the current gold price development may be disappointing. Nevertheless, when you look back at our research over the last years and you look at the scenarios we developed, you probably will have to admit that they are pretty banging (please excuse that expression, it is one of my son’s favourites) with increasing inflation, higher interest rates, central banks being behind the curve, possible stagflation (maybe not in the U.S. but in Europe, where it will be pretty hard to avoid). Look, Ladies and Gentlemen, I think the one exception is gold, which did not turn out to take advantage of the current situation and become a winner.

Forecast

As I did point out to Joao the other day: «We can not foresee the future, not with the best models and not with the best intentions. Gold will most probably always be an excellent inflation hedge but not necessarily in the short-run. Over decades or better centuries, gold will most likely keep its purchasing power, at least so far it has; however, gold holders may seek shorter-term performance, and there may be a mismatch between investors’ expectations and the price movement itself.»

Ladies and Gentlemen   

As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to: smk@incrementum.li

Many thanks, indeed!

I wish you an excellent start to the day, a great weekend, and above all and still, peace!

Yours truly,

Stefan M. Kremeth
Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li