Writing in yesterdays Wall Street Journal under the headline, Why Gold Prices Are Hitting All-Time Highs, Joe Wallace stated:
“Gold prices are on track to notch new records this week…the precious metal has soared almost 35% in 2020…”
Well, from its 2020 low point, so has the stock market! (See chart above.)
The major difference between the two is that, with fluctuations, the stock market will keep on rising. (“The market will fluctuate. “J. P. Morgan)
An authoritative paper* states:
“Gold has been described as an inflation hedge, a “golden constant”, with a long-run real return of zero.”*
The 117-year table below (used with permission) is from Credit Suisse, another authoritative source.
It shows the 117-year real return from gold to be just above half a percent per annum.
We posted a blog about this phenomenon almost exactly one year ago. It is worth re-stating in order for new members to see the investing world as it is. For long-standing members, it is worth repeating.
There are several gold producers in the S&P 500. By investing in an exchange traded fund which parallels the S&P 500, Monday Morning Program members own gold that way.
In our opinion, no one needs more.
Investing the Monday Morning Program way works.
*Erb, Claude B. and Harvey, Campbell R., The Golden Dilemma (May 4, 2013). Financial Analysts Journal, vol. 69, no. 4 (July/August 2013) 10-42.. Available at SSRN: https://ssrn.com/abstract=2078535 or http://dx.doi.org/10.2139/ssrn.2078535
The Monday Morning Millionaire Program was designed to offer compressed investment convictions. Over the last two decades, the program has outperformed over 90% of portfolios including professionally managed ones.
The program does not provide any investment advice or endorsements.
With fewer than 350 words, members can read this post in less than five minutes. Following and studying the links imbedded in these posts would take longer. How members manage a post depends on their level of interest and investing knowledge.l