In my article entitled “The Optimum Asset Allocation to Gold Is Always Zero” I wrote:
Jeremy Siegel’s book “Stocks for the Long Run” includes the growth of $1 of various investments from 1802 through December 2006. After being adjusted for inflation, gold grew from $1 to $1.95 while stocks grew from $1 to $755,163. At those rates, stocks have an average annualized appreciation over inflation of 6.86%, whereas gold is just 0.33% over inflation.
In that article I also wrote:
Gold is a safe store of value but not an investment. Cash isn’t a safe store of value. When adjusting for inflation, $1 has dropped to just $0.06 in buying power over the last 200 years. Cash doesn’t pay you money and is not an investment. The correct asset allocation to dollars is also zero.
Here is the chart from Siegel’s book supporting both of these quotes:
For a recent chart of gold against the Consumer Price Index and the S&P 500 read “Since 1979 The S&P 500 Grew 13.5 Times Greater Than The Price Of Gold.”