Does it make sense to look at gold as an investment?
If you look at historical gold prices over the last 70-80 years, then it does make sense to think of gold as a good asset type in which to put some proportion of your savings. Apart from an anomalous period during the late nineties, Gold has yielded around 8-10 per cent a year over most of period since around 1920. What is bad is doing what most seem to be doing in the name of investing for gold. We have this idea that gold is a good investment for bad times and then instead of buying gold, we buy jewelery. But there’s a problem. Jewelery is not gold, at least it’s not the kind of gold that can be considered an investment. Read And interestingly, the common belief that gold does better during times of economic and political distress has also held true. During these years, high jumps in gold prices have occurred during the 1940s and the 1970s, both periods of greater turmoil than normal. For example, from 1965 to 1980, gold sustained an increase of 21 per cent a year, more than keeping
