Just curious: how do gold and S&P compare on a total return basis (subtracting storage charges/etf fees from gold and adding dividends to S&P, compounding over time)? I should think that would be the true comparison.
The S&P 500 is measured with dividends assumed to be reinvested, so what you see is what you get. As for storage charges for gold: The number is based upon the value in $ of one ounce. Storage charges can be eliminated if your gold is in a personal safe in your home. Storage charges at another location are not standardized. I surely would hope that a few ounces would not need to incur storage charges from an outsider.
Relative value depends on when you start counting. Let’s start when gold decoupled from its long term steady price. Gold sold for $20/oz continuously until January 30th, 1934. Dow sold for 103.74 on that date. At current prices, the DOW is up approximately 468 times since then and gold is up about 225 times. That’s not counting dividends. Nowhere near a superior performance for gold.
dr. b..Hmmm let's see your point appears on surface to be valid BUT only if you (or your Father or Grandfather were at least 16 yrs old in 1934 and "in the market." So that was 91 yrs ago!
I actually agree that where you start counting matters - which is why I never said gold always beats stocks. I explicitly said it doesn’t. That said, 1934 isn’t a meaningful reference point. Gold ownership was illegal, pricing was fixed, and it didn’t become legally investable again until 1974. It’s also more than 90 years in the past (which makes it even less relevant for anyone investing today). That’s why I focused on the post-2000 period. And like I said in the piece, over that stretch, gold has outperformed mainstream stocks by roughly a factor of four - long enough and strong enough to be meaningful, and still relevant to how people actually invest today. Different assets win in different cycles. My point is simply that we’re in a cycle where gold deserves far more respect and attention than it’s been getting - something a lot of people still don’t seem to realize.
Great data points and nice overview Lau. Thanks!
Love to see the same type of charts with the relationship between gold and bitcoin. Hope so. Ken
Thank you very much Doug!
It is Much appreciated!
Happy new year wishes to all!
Just curious: how do gold and S&P compare on a total return basis (subtracting storage charges/etf fees from gold and adding dividends to S&P, compounding over time)? I should think that would be the true comparison.
The S&P 500 is measured with dividends assumed to be reinvested, so what you see is what you get. As for storage charges for gold: The number is based upon the value in $ of one ounce. Storage charges can be eliminated if your gold is in a personal safe in your home. Storage charges at another location are not standardized. I surely would hope that a few ounces would not need to incur storage charges from an outsider.
Relative value depends on when you start counting. Let’s start when gold decoupled from its long term steady price. Gold sold for $20/oz continuously until January 30th, 1934. Dow sold for 103.74 on that date. At current prices, the DOW is up approximately 468 times since then and gold is up about 225 times. That’s not counting dividends. Nowhere near a superior performance for gold.
dr. b..Hmmm let's see your point appears on surface to be valid BUT only if you (or your Father or Grandfather were at least 16 yrs old in 1934 and "in the market." So that was 91 yrs ago!
It’s valid as a fuller picture of the history of golds performance, it’s not valid as a relevant time frame for above ground investor's
I actually agree that where you start counting matters - which is why I never said gold always beats stocks. I explicitly said it doesn’t. That said, 1934 isn’t a meaningful reference point. Gold ownership was illegal, pricing was fixed, and it didn’t become legally investable again until 1974. It’s also more than 90 years in the past (which makes it even less relevant for anyone investing today). That’s why I focused on the post-2000 period. And like I said in the piece, over that stretch, gold has outperformed mainstream stocks by roughly a factor of four - long enough and strong enough to be meaningful, and still relevant to how people actually invest today. Different assets win in different cycles. My point is simply that we’re in a cycle where gold deserves far more respect and attention than it’s been getting - something a lot of people still don’t seem to realize.