$1,000 Gold Investment Returns Outpaced by Stocks Over Last Decade

In the fall of 2016, someone invested $1,000 in gold. This decision was made without much fanfare or expectation of immediate returns. The buyer purchased a small amount of gold, likely about 0.758 of an ounce, given the spot price at the time.

The gold market has experienced significant volatility over the past decade, with prices fluctuating between $1,319 and $5,279 per ounce. Despite this volatility, the value of the initial investment in gold has increased from approximately $1,000 to around $3,330 today, representing a gain of about 233% or roughly 12.8% annually.

For comparison, investing $1,000 in an S&P 500 index fund with dividends reinvested over the same period would have yielded a return closer to $4,100, slightly outperforming gold's returns. This highlights that stocks have consistently outpaced gold investments over the past decade.

The article emphasizes the importance of understanding the true nature of gold as an investment. It is not a productive business that generates cash flow or dividends but rather a store of value that maintains its worth in case of economic uncertainty.