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Post–Gold Standard: Gold Outperforms Stock Market

Jun 18, 2018 | Kevin Troy |

Post–Gold Standard: Gold Outperforms Stock Market

Until 1971, our government used to dictate the price of gold, which was referred to as the gold standard. Gold backed up our the US dollar this way and its price remained the same for decades at a time until modified by the government to reflect the ever growing printed money supply backed by gold. The chart below shows the price of gold since 1915.

In 1971, President Nixon removed the gold standard, and since then the performance of gold has been nothing but phenomenal, as witnessed in the charts below.

Gold historical price chart showing that Gold went up 36.42 times since the 1970s.

 

Historical price chart for the Dow Jones – May 1970 until today

DJIA Price chart showing that Dow Jones went up 5.34 times since the 1970s.

The bottom line is that gold did 6.8 times better than the Dow Jones.

This doesn’t mean you should invest all your money in gold. On the other hand, you shouldn’t invest all your money in stocks and bonds either. The point is that the Dow Jones is not superior to gold. The two assets are highly uncorrelated, so gold would be an excellent asset to diversify your portfolio as a proven safe-haven investment showing historical returns on investments.