Over 21 Years Gold Lost 70% Of Its Value

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In my article entitled “The Optimum Asset Allocation to Gold Is Always Zero” I wrote:

In January 1980, gold reached a high of $850 an ounce ($2,399 in today’s dollars). For the next 21 years the price of gold dropped to a low of $256, losing over 70% of its value.

The price of gold peaked at $850 an ounce on 1/21/1980. It bottomed 21 years later on 4/2/2001 at $255.95. The decline looked something like this:

Gold Decline

And if we compare that decline with the Consumer Price Index you can see that gold lost even more of its purchasing power during its decline:

Gold Decline

And if we add in the Total Return of the S&P 500 you can see the lost opportunity costs of not having been invested in the markets.

Gold Decline

Gold is very volatile. Read “Over 11 Years Gold Rose Over Six-Fold” to see that gold can go up as well as down!

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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.