Forbes: Gold Has Outperformed Stock Markets Since 1999Paul-Martin Foss
Read any of the mainstream financial media commentary about gold and you’ll likely hear that gold is a horrendous investment that doesn’t make any gains and doesn’t provide investors with any growth in wealth. But that attitude is most often coming from pundits who made great gains in the ‘80s and ‘90s and haven’t actually taken a good look at actual asset performance in decades. Those investors who actually dig deep and look at the numbers know that gold has been one of the best assets to buy over the past 20 years.
To that end a recent column at Forbes has highlighted just how well gold has grown. Since 1999 gold’s annualized gains have come in at 7.7%. The only asset with better performance since that time is real estate investment trusts (REITs). Gold has outperformed oil, stock markets, bonds, and even houses. And compared to the returns of the “average investor” at 1.9% per year, gold has quadrupled that performance.
Too many investors get caught up in stock market nostalgia, thinking that the nearly 15% annual returns of the 1982-2000 bull market are going to return. But for every huge rise in stock prices there was a huge drop. The first was the bursting of the dotcom bubble in 2000-2001, then the collapse of the housing bubble and the financial crisis of 2008. Now we’re on the verge of yet another stock market tumble that will wipe out all of the gains made over the past three years.
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Unless investors have prepared for that stock market crash, they’ll likely see portfolio losses on the order of 2008, when many investors lost more than half of their savings. That’s why many investors who are set on protecting their assets have decided to invest in gold, seeking to benefit from the asset protection it offers. Not only does the gold price normally increase when stock markets decline, but over time it has even outperformed stock markets in the long run, as the statistics of the past 20 years bear out. For investors who want to continue making gains even in the face of a financial crisis and stock market crash, there’s no better choice than gold.