Some love gold, others do not care for it. Some say you must own it, others seem impartial. Where should you fall?
Gold's Return the last 51 years:
January 1971 - December 2022 7.78%
Gold Returns through the decades:
2010's 3.5%
2000's 14.3%
1990's -3.3%
1980's -2.4%
1970's 30.8%
Price of Gold on January 1980 $678 per ounce
Price of Gold on December 2022 $1,824 per ounce
That is a 2.3% return over 43 years.
Adjusted for inflation -0.8%
Let us look at the returns of the S&P 500 Index over those same time periods:
S&P 500 Index Return the last 51 years:
January 1971 - December 2022 10.6%
S&P 500 Index Returns through the decades:
2010's 13.6%
2000's -0.9% (the lost decade - diversification outside the S&P 500 Index might have helped here)
1990's 18.2%
1980's 17.5%
1970's 5.9%
January 1980 - December 2022 11.5%
Adjusted for inflation 8.1%
I'm hurt but I'm ready to defend my honor.
When was the worst 43yr window of time for the S&P 500 Index?
1929 -1971
This window of time included the great depression.
It also included NINE negative calendar years from 1929 to 1941.... so 9 of the first 13 years were negative in this 43 year window.
So... what was the return? 8.4%
Adjusted for inflation 6.2%
Guess what the lowest return of ANY 30YR WINDOW of time going all the way back to 1926 in the S&P 500 Index is?
7.8% (this is an annualized return)
The TOTAL RETURN over this time period is 850%
To insure you did not miss that: The WORST 30yr return over the past roughly 100 years in the stock market is a total return of 850%
Inflation
Gold
Stock Market
2010's 1.8% / 3.5% / 13.6%
2000's 2.5% / 14.3% / -0.9%
1990's 2.9% / -3.3% / 18.2%
1980's 5.1% / -2.4% / 17.5%
1970's 7.4% / 30.8% / 5.9%
Gold did its job in the 1970's and 2000's, but does it always?
Don't forget about this piece of information I shared above:
The INFLATION ADJUSTED return of gold from January 1980 to December of 2022 was -0.8%
The INFLATION ADJUSTED return of the S&P 500 Index from January 1980 to December of 2022 was 8.1%
Here I am identifying all the worst years in the stock market going all the way back to 1970 and comparing those years, to gold's return that year. Don't the ads always say, "BUY GOLD!" when the stock market is falling?
The Worst Calendar Year Stock Market Returns
Gold Returns In Those Same Years
The Golden Years
1973 -14.7% / 65%
1974 -26.5% / 42%
1977 -7.2% / 21%
The Not So Golden Years
1981 -4.9% / -26%
1990 -3.1% / -7.8%
The 21st Century - A Mixed Bag Thus Far
2000 -9.1% / -4.6%
2001 -11.9% / 5.3%
2002 -22.1% / 17.7%
2008 -37% / -2.2%
2018 -4.4% / -4.5%
2022 -18.1% / 1.6%
I have an immaculate takeaway of the information presented here in my video above. To save you some time, jump to the 5:00 mark to hear it.
Sources & Disclosures found in the video link on Youtube