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Gold doesn't appreciate in value. It's an important distinction when considering investments. It tends to act as a store of value, that is it retains value. While the dollar price of gold goes up (now ~$2700 (!) as the dollar keeps imploding over time), that isn't the same as it appreciating in value. The dollar is losing value, gold is what is staying still in terms of value. And while that isn't always perfectly accurate (certainly gold sometimes varies upwards or downwards in value for various supply etc reasons), it tends to be mostly correct.

The reason it's an important distinction is because eg the S&P500 will tend to smash gold over time as a value generative asset (because gold is not a productive, generative asset; gold holds value, the S&P500 generates value (profit/growth/etc)).



yes, but... if you invested 1K USD in gold and 1K USDin a SP500 index fund in 1971, both of those investments would be worth the same dollar amount today.

perhaps that's an artifact of gold's recent spike in price, but perhaps the SP500 is also in the middle of a giant bubble.

https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart

Go ahead, cherry-pick some other dates to tell the story you want!


From what I can tell, this tracks just the S&P500 index, but ignores dividends.

The S&P500 return with dividends reinvested since 1971 is $257 for every dollar invested. Gold is $8 for every dollar invested.

And that's with 1971 being the lowest gold price in 100 years and the current price being nearly the highest in 100 years.

For reference, the CPI inflation calculator puts inflation at 7.9x since 1971. So gold track inflation in the best case scenario.


> both of those investments would be worth the same dollar amount today

Only one of those investments would also have generated thousands of dollars of income in the meantime.


is there a gold to big mac index to track the valuation drift?




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