Gold vs. the S&P 500 Total Return 2000 – 2009

Check out this graphic I put together using the information I found on

During the first decade of the 21st Century, the price of gold has seen an average annual increase of 14.41% compared to the S&P 500 Index’s Total Return of -.95%. For those who are interested, I put together a History of Gold Prices 2000 – 2009.

This is not to be taken as a promotional for investing in gold. I think gold can drop in value just as much as any other asset. And, since I see 3 or 4 gold commercials every 30 minutes on the news networks, it makes me think a bubble may be forming. Who knows. I sure don’t.

In his book, The Little Book of Bull Moves* (highly recommended), Peter Schiff recommends using gold as gauge for inflation:

“The concept of inflation remains fairly elusive: Since the real rate can’t be quantified, we have to compare changes in nominal prices to price changes in a commodity, such as gold, which is a better store of value and therfore a more objective standard by which to measure prices. Ratios representing these price relationships have historically guided us in judging how much inflation is reflected in nominal prices.”

He even mentions that he thinks inflation has run closer to 8 – 10 percent per year rather than the 4 percent the government has been publishing via the CPI. Interesting…

*Affiliate Link

2 thoughts on “Gold vs. the S&P 500 Total Return 2000 – 2009”

  1. I tend to think the gov’t markedly understates inflation, as well … but that hasn’t motivated me to go out and load up on gold or gold-backed assets. Yet.

    You’ll know there’s a bubble in gold, and the top is near, when I’ve gone “all in.”

    I’ll be sure to keep you posted, so that you’ll know when the time’s right to initiate your short positions in the precious-metals markets.

  2. Buying gold would be one of the biggest financial mistakes someone could make (Glenn Beck be damned).

    “Since Jan. 2, 1980, when trading in gold futures began, gold is up 115% while the S&P 500 has soared 890%.”

    Gold is a chunk of metal, it doesn’t “earn” anything. At _best_ it is just a store-of-value, at worst (like now) it is a huge bubble ready to burst — and that is not even considering the huge mark-ups that gold dealers put on coins which drive ROR even lower.

Comments are closed.