If I had invested in 1980, after the enormous increase in gold in the 1970s, I would have lost money due to inflation for the next 35 years. When evaluating the performance of gold as a long-term investment, it really depends on the time period being analyzed. For example, over certain 30-year periods, stocks have outperformed gold and bonds have performed similarly, but over some 15-year periods, gold has outperformed stocks and bonds. To get a historical perspective on gold prices, between January 1934, with the introduction of the Gold Reserve Act, and August 1971, when President Richard Nixon shut down the United States, I've seen some solid arguments in favor of a relationship between gold and real interest rates, but that's the kind of thing that can come and go as you please.
Investors often turn to gold when there is fear in the market and they expect stock prices to fall. Before the enactment of the Gold Reserve Act, President Roosevelt required citizens to hand over gold bars, coins and banknotes in exchange for U. Depending on the time frame, gold has been a terrible investment or a solid (no pun intended) diversifier. There is still a lot of time left in the current decade, but if things continue as they have in recent years, gold may have negative real returns in three of the last five decades.
And, although gold is traditionally considered to be a safe asset, it can be very volatile and lower in price. When rates can return to normal, gold will fall back into a secular bearish position and stocks will thrive. Gold is one of those investments that attracts extreme points of view and ideological arguments that favor narratives over substance. Since then, it has fallen at the same rate as the market and currently stands at 20.9, which is essentially equivalent to its average of the last 50 years.
My goal is to invest about 10% of my savings in precious metals, which are stored in a vault outside the commercial banking system, because, in the event of a crisis, the government is likely to prevent people from accessing safe deposit boxes and may even confiscate gold and other items from them. GC00 gold, at +0.27%, was the best-performing asset class, with an annualized return of 8.8% over the past 20 years. From 1971 to 1999, the total return approached 6% per annum, demonstrating what part of the total return up to that point occurred in the 1970s.