Since 1979 The S&P 500 Grew 13.5 Times Greater Than The Price Of Gold

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In my article entitled “For The Past 34 Years, Gold Has Just Kept Up With Inflation” I wrote:

So $512 grew to $1,368.75 of gold or $1,552.93 of CPI Index equivalent purchasing power.

I gave this chart showing Gold vs. the CPI Index:

Gold vs. CPI

From the end of 1979 through 4/30/2013:

  • An ounce of gold grew from $512 to $1,430.89.
  • The CPI Index grew from $512 to $1,552.93 for an equivalent purchasing power.

But what I didn’t show is the growth of the S&P 500 Total Return.

  • And $512 in the S&P 500 grew with reinvested dividends for a total return of $19,323.19 which is 13.5 times greater than gold.

Here is a chart which adds the S&P 500 Total Return:

Gold vs. CPI vs. S&P 500

Which is why I wrote in “The Optimum Asset Allocation to Gold Is Always Zero“, “The optimum allocation to gold is always zero because its return is too low to be a real investment.”

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David John Marotta is the Founder and President of Marotta Wealth Management. He played for the State Department chess team at age 11, graduated from Stanford, taught Computer and Information Science, and still loves math and strategy games. In addition to his financial writing, David is a co-author of The Haunting of Bob Cratchit.