Gold is the Worst Investment in History

What a crock!

 

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The New Gold is long-duration U.S. Treasury bonds...that's what capital seeks in a crisis.

In 1979, the gold market traded $800 million a day and so too did foreign currencies. Today, the gold market trades a bit over a billion dollars a day and currencies are a $4 trillion dollar a day market.

 

The stock market has returned on average 7% per year after inflation over those 200 years. Yes, 1 dollar compounded at 7% for 200 years is worth $755,000. Compound interest, the most powerful force in the universe!

 

Gold isn't an investment and never has been. It's a safe haven. Investments come with risk, greater the risk, greater the income or loss.

 

Believe what you want. It's not costing me anything.

 

Ah, someone is trying to . Silly article, trix are for kids!

 

I agree in so much as that probably ignores transaction costs associated with re-balancing that portfolio in the 170 years prior to low cost index funds. But the math is what the math is, so take a percent off the cagr, you're still not happy?

 

Who compiled the data that led to the 7% return? An entity from the financial sector? Sorry, I don't trust or believe anyones figures but especially them.

 

Actually the FTC compiles that info and publishes those numbers, and do not benefit from doing so. However, 7% is an extremely conservative estimate. Most funds exceed 12% regularly.

 

Where do they publish them?

 

Annual reports.

 

The number is mathematically calculated from any of the major indices: S&P 500, Dow Jones Industrial Average, Wilshire Index, Small Cap indices (track record spotty before 1950).

Numbers are numbers. If you can do math, as long as the numbers are correct, you should trust the calculations if it comes from whomever.

Rolling periods eliminates start/ending bias:

 

The FTC does not publish stock market data. It is compiled by SROs, Statistical Rating Organizations (i.e., Dow Jones, S&P, etc.).

12% is high, and is nominal (before inflation). Figure 10-11% depending on the period and type of stocks chosen.

 

That point is that the $755,000 return on stocks is not adjusted for inflation and the $1.95 value of the gold has been adjusted for inflation.

If we assume an average 3% annual inflation, that chops the $755,000 down to a much more reasonable inflation adjusted $2,984. ...and that's before adding in any expenses or fees.

I do agree that stocks are a much better investment and have performed significantly better than gold, but 38,717,949% better? I think not...

 

It's historical data, it's all over the web, either the raw data (index values) or actual calculators (including or without dividends).

Deals with A company only, not the market.

 

Both the stock and gold return were adjusted for inflation. It was apples to apples.

 

Tell me again why I should trust SRO's.

https://www.google.com/url?q=http:/...Uw_d_g&usg=AFQjCNEbAI87ceBrHGo_-qxeuTRZSvRnpQ

 

Gonna be a field day for the lawyers........

 

Because that deals with an investment product, not data.

And if you followed this like I did, you would know this is not about shady practices or illegal sales or deception. It's about.....

$$$$$$$$$$$$$$$$$

We are not talking about investment products, we're talking about data. SROs are monitored by the SEC to make sure that the data is not used to mislead consumers, but the data is the data.

You can disagree with their use of the data or their investment products, but not the data themselves. Like disliking a meteorologists forecasts without questioning his daily temperature readings. Those are empirically verifiable, as are financial data.