S&P 500 has outperformed gold on a 20 yr and 30 yr basis.

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Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
S&P 500 has outperformed gold on a 20 yr and 30 yr basis.

Here is the annual data for gold and its averages for the past 30 years:

Year Average Low High
1975 161.03 128.75 186.25
1976 124.82 103.50 140.35
1977 147.72 129.40 168.15
1978 193.24 166.30 243.65
1979 306.67 216.55 524.00
1980 612.74 474.00 850.00
1981 459.75 391.25 599.25
1982 375.80 296.75 488.50
1983 424.12 374.25 511.50
1984 360.36 303.25 406.85
1985 317.27 284.25 340.90
1986 367.94 326.00 442.75
1987 446.07 390.00 502.75
1988 436.77 389.05 485.30
1989 380.79 355.75 417.15
1990 383.59 345.85 421.40
1991 362.26 344.25 403.70
1992 343.95 330.20 359.60
1993 359.82 326.10 406.70
1994 384.15 369.65 397.50
1995 384.05 372.45 395.55
1996 387.87 367.40 416.25
1997 331.29 293.00 367.80
1998 294.09 273.40 313.15
1999 278.76 252.80 325.50
2000 279.06 263.80 312.70
2001 255.95 293.25 271.07
2002 277.75 349.30 309.88
2003 319.75 263.80 363.58
2004 409.35 373.50 455.75

 

A simply SPX chart will show SPX 1990 at 326 and SPX 1980 at 117. Gold was at 383 in 1990 and 612 in 1980. SPX performed 330% since 1990 while gold returned 310%. Since 1980 SPX has returned 923% while gold has returned 100% since 1980.

I am a gold bug myself but here is the math. People keep quoting the past decade but I wanted to check a bit further and these are the results. The question then is which of the two would benefit more and thus, outperform, in a hyperinflationary situation?

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 3125
Re: S&P 500 has outperformed gold on a 20 yr and 30 yr ...

Measuring since 1980 is a bit misleading as that was the last peak in gold before a 20 year bear market, just as measuring since 2000 is misleading as that was the low point at the end of the bear market.  But, as we are so fond of saying, this time its different.  I don't see how the USD can retain its value beyond the near term future.  That should mean that gold will be the store of value.  But who really knows?  In the final analysis gold is just heavy stuff that's pretty to look at.  It has no intrinsic value except as bling, unlike the other PMs that have industrial uses.

Well, I expect an interesting ride in the near future.  Hang on.

Doug

Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
Re: S&P 500 has outperformed gold on a 20 yr and 30 yr ...

SPX 1976 average 102/ 1083 = 1060% return

Gold 1976 average 124/ 1215 = 979% return

From 1976 we have comparable returns. Interesting...

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1323
Re: S&P 500 has outperformed gold on a 20 yr and 30 yr ...

I think over the long run we will see gold act as money.  I thin the last 30 (acutally 100 years) it has been manipulated.  That said, I would actually expect stocks to perform better over the long run than gold.  After all you are supposedly investing in production of goods.  Gold is simply a way to store wealth and can't be compared to something productive.  Of couse, investing as opposed to storing, means you have a potential to be wrong and loose.

Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
Re: S&P 500 has outperformed gold on a 20 yr and 30 yr ...

I agree with you rhare 100%.

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