THE FOLLY OF BELIEVING IN GOLD AS AN INVESTMENT!

September 22, 2023

Recently the August 7th online edition of the Wall Street Journal had an article: “When Markets Get Scary, Mom and Pop Buy Gold.”

To set the record straight, if you had “invested” in Gold (@$800 per ounce) about 44 years ago, your overall rate of return would be about 1.8% per year. Gold does not produce dividends, nor interest. It just sits there looking pretty. On the other hand, if you had invested the same $800 in the S&P500 Stock Index at the end of January 1980 at 115, it is now: 4490- up 39 times not counting dividends, which gold does not pay.

Hands down the “Stock Market” investment outpaced inflation over gold. The CPI (consumer price index- a measurement of inflation), went up 4 times. Gold only went up about 2 times in the same time frame. Your $800 investment in the “market” would be worth about $95,000 with dividends reinvested and taxes paid from another source.

I rest my case.

 

The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. Indices are unmanaged, and investors cannot actually invest directly into an index.