In fact, Gold's recent rally is much more pronounced if you look at the multi-year returns. This is shown in the table below, using the standard calculation of compounding annual growth. That shows you the gain required each year to get to your end price of $1,733.
Dollar Gain Compound Growth
2020 + $220
One year + $436 +33 %
2 years + $440 +16 %
3 years + $502 +12 %
5 years + $515 + 7 %
10 yrs. + $500 + 3.4%
15 yrs. + $1,300 + 9.4%
20 yrs. + $1,443 + 9.0%
We have advocated since 2011 to use Gold as an insurance policy against financial calamity and unforseen disasters. It may not be needed for that much of the time, but is invaluable when things get scary. This shows you the longer term GAINS in holding Gold across the years, during good and not so good times.
Notice the sub-par returns on the 5 and 10 year holding periods. That's due to the three year Gold year bear market, 2013-15 losing $600/ounce or about 1/3rd.
While you can certainly find many other time frames in which Gold underperformed other investments like stocks or bonds, we still feel a weighting of at least 10% in Gold is warranted now in most diversified (balanced) portfolios.
Gold has experienced a really good century thus far; $100 invested in stocks (S&P 500) grew to $276, while $100 in Gold bullion grew to $566. Besides the three year losses cited above, Gold prices completely ignored the 2000-2002 bear market, and the 2007-2009 Great Recesssion, rising 18% and 70% in those two time spans.
Now, you're a smarter investor, and a Gold afficianado too!
Thanks for reading!
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