Stocks vs Gold, which is better?

The debate of whether it is better to invest in gold or stocks contines.  So let's check the numbers: 

Since January 1971, when the United States went off the gold standard, Gold has increased 12,618% for an annualized compounded rate of 9.21%, while the S&P 500 Index has a total return (including dividends) of 8,060%, or 8.33% annualized compounded return. GOLD WINS!

But wait! If you reinvest all dividends since January 1971, the S&P 500 has a total gain of 29,954%, or 11.02% per year annualized compounded return. STOCKS WIN!

I like to think of it as a Super Bowl contest where both teams score several touchdowns, and tie at the end!

Summary: Invest in both stocks and gold. They are a winning combination

Meanwhile, the value of the dollar has gone down.On thing can't be denied: both stocks and gold have outperformed holding hard currency.

 By the late 1960s, the number of dollars in circulation was too high to be backed by U.S. gold reserves so the government ended the gold standard to allow for more money to be printed.

Money supply (M2) in the U.S. has skyrocketed over the last two decades, up from $4.6 trillion in 2000 to $19.5 trillion in 2021.

The effects of the rise in money supply were amplified by the financial crisis of 2008 and more recently by the COVID-19 pandemic. In fact, around 20% of all U.S. dollars in the money supply, $3.4 trillion, were created in 2020 alone.

Gold cannot be printed. 

By Rob Longwell