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S&P 500 vs. Gold: Who's the historic winner?

April 14, 2020

Following the stock market for the last month has been almost as nerve wrecking as being on a roller coaster. Investors are left scratching their heads on what a safe investment would be at this point. Let’s look at the last twenty years to see how gold has performed compared to the S&P 500 and other stock market indices and avoid an “I told you so” from American journalist Sydney J. Harris:

THE LAST TWENTY YEARS

Did you know that the U.S dollar has lost 35% of its purchasing power in the last 20 years? On the other hand, gold quadrupled its value in the same timeframe!

Source: https://www.americanbullion.com/gold-ira-infographic/

Here is more food for thought. Had you invested $10,000 in the S&P 500, Nasdaq and the Dow Jones in the year 2000, today you would have $23,500, $24,300 and $26,800 respectively. During the same time, had you put $10,000 in gold, you would have over $50,000 today!

Sure, you wouldn’t have put all your eggs in one basket. The graph below shows how your investments would have performed if you had diversified half of your portfolio with gold. Your gains would have increased 271% by investing half of your money on gold and keeping the other half on NASDAQ, compared to just about 110% without any gold exposure:

Not convinced yet?

How about following the steps of billionaire investors?

Source: Visual Capitalist

 

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