Tuesday, July 08, 2008

... which brings us back to gold.

A quote from the Economist article cited yesterday:

real returns from American shares were just 0.1% a year from 1966-81; they fell a dismal 1.3% a year from 1973 to 1981.

Although that performance was much better than the painfully negative returns suffered by holders of government bonds, it was a long way short of the 6-7% returns that shares have historically achieved. Gold was a much better inflation hedge, earning an annual 10.9% in real terms between 1966 and 1981.

Which is, I suppose, what Marc Faber means by recommending gold at this point.

2 comments:

  1. James Higham8 July 2008 at 10:07

    Gold and silver are too regulated, don't you think?

    ReplyDelete
  2. Sackerson8 July 2008 at 12:03

    Yes, I understand holding gold in the USA was illegal for a while.

    ReplyDelete

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