Posts filed under “Gold & Precious Metals”
The chart above shows the rolling returns for stocks and gold.
Catherine Mulbrandon of Visualizing Economics writes:
For the period 1928-2013, the average annual compound real return of stocks = 6.3% and gold = 2.0%. However, the price of gold was controlled by the government until the mid-70s when the US finally abandoned the gold standard. For the period 1976-2013, the average returns were stocks = 7.2% and gold = 2.0%.
If you want to know what someone’s views of society are, ask what they believe is the best long-term investment. I am fascinated each year when Gallup Poll asks Americans to choose the best option among real estate, stocks and mutual funds, gold, savings accounts and CDs, or bonds. The results are a pop psychologist’s…Read More
click for ginormous graphic Source: Visualizing Economics Earlier this year, we discussed the Lessons Learned from the Fall of Gold. That surprisingly generated some controversy despite the near 40% collapse from its 2011 peak. Rather than spill a lot of ink onto the page, I wanted to direct your attention to the following…Read More
Last week, we published a 2,500-word opus on what lessons could be learned from the rise and fall of gold. There was lots of feedback on the general concept and many of the specifics. By and large, the response was positive, with most of the pushback coming from those who were long gold or other…Read More
> I did something different with my Sunday Washington Post Business Section this week. Starting with the 2,500 word long form discussion I wrote for Bloomberg, I simplified this and edited it down to half that length. The print version had the headline Bitten by the gold bug? You’ll do well to heed the…Read More
This morning, I have a massive 2500 word piece at Bloomberg looking at the rise and fall of Gold.
The key to the discussion are the 10 lessons that we all can takeaway from that cycle and the experiences of Gold investors. Hopefully, these will make us each better investors in the future.
Here is the intro:
“It has been quite the ride for gold: from under $500 an ounce a decade ago, to above $1,900 in 2011, gold gained more than 400 percent. Since its peak of ~$1,921.15 on Sept. 6, 2011, however, the shine is off the yellow metal. Gold plummeted 38 percent, recently breaking below $1,200. Yesterday’s close is within 5 percent of the lows, at $1,241.
If a 20 percent drop is described as a bear market, and a 30 percent fall is called a crash — what do we call gold’s almost 40 percent plummet?
This column is not an “I told-you-so” or an exercise in “Goldenfreude” (describing a “delight in gold bugs’ collective pain”). Rather, it is an attempt to learn some investing lessons from the epic rise and horrific fall of gold.
As an investor, I am a gold agnostic: When used properly, the metal is a potentially valuable tool in an investment arsenal. There are times when it makes for a profitable part of a portfolio, as in the 2000s. There are periods when it is a speculative and dangerous trade — such as the 2010s. There have also been decades when it does nothing, earning no return, generating no income, essentially dead weight to a portfolio, as in the 1980s and 1990s…”
Full column after the jump: