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Anacott Steel

1,444 Posts.

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26/01/20

20:11

Post #: 42582082
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Originally posted by Dr.Who: ↑

Long term returns are terrible.

The long term, real return for gold is abysmal. When gold’s value goes up, it gets a lot of press and attention. Everyone is talking about it. We saw that back in 2011 when gold prices rose. But it’s since fallen quite a lot.Back in 1980, the price of gold went up to $850 an ounce. It got a lot of attention, fanfare, and news coverage.

But long term, gold doesn’t really go up that much. A study mentioned in the New York Times looked at the return of gold from 1836 to 2011. Once you factor in inflation, the long-term return on gold is just 1.1%.

To put that in comparison, treasury bills returned about 1%. Inflation-adjusted returns for long-term bonds were 2.9% over that time period, and stocks returned 7.4%.So in spite of the fanfare gold gets when prices skyrocket, the long-term returns – after inflation – are simply terrible.

Caveat Emptor. Inevitably gold will regress to its mean.

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Compare to a lot of assets over the last 19yrs Golds return has been ave, the real test is when or if debt implodes and asset prices collapse, should gold hold the current value of the day, we would be more than happy.
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