It's time for a history lesson for all you young folks who are whining about the recent dip in the price of gold.
The high-water-mark of gold is about $1900. Today we ended at about $1570. Let's calculate the magnitude of this most recent "loss." (1570/1900)-1 = -17.4% (approximately).
This is nothing! In recent history, look at this loss. 3/17/2008: price: $1011 10/24/2008: price: $712
Loss: (712/1011) - 1 = -29.6%
Now, even if you invested at $1011 (the high water mark at that time) you'd be very well set today. $1570/1011 = 55.3% return over about 4.5 years. That's not bad!
Take another step back. Let's take a gander back in history shall we? 12/30/1974 the closing gold price for the day was: $195.25 8/25/1976 the closing gold price for the day was: $103.50
(103.50/195.25)-1 = -47% appx. Now THAT's a LOT OF LOSS!
People back in the day said that the "run was over." Now, what happened a few years later?????
1/21/1980 price of gold: $850 Now, suppose you are a terrible investor. You bought gold on 12/30/1974 and you didn't sell out on 1/21/1980. Suppose you sold on an "average" day in 1980 (average close price for the year was $614). Your return was: 614/195.25 - 1 = 215% appx.
We are not in unprecedented territory. Take it easy the best is yet to come.
