These days it includes the huge waste from so called healthcare. Gross indeed!
The Captain
Gold was almost $2000 an ounce in 2011, 12 years ago. Make of that what you will.
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It was $850 in 1980, too. Great investment over time!
Pete
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Depending on when you buy. People have the bad habit of buying high on euphoria and selling low on panic (chasing yield).
The Captain
It was $35 dollars in 1971 before the USA defaulted on The Bretton Woods agreement.
I got the bulk of my gold between 2014 and 2019 so I’m up about 28% - a tax free gain here in the UK and no counterparty risk.
It’s just one component of a very widely balanced portfolio.
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The rest of the cost of governing ourselves has plenty of its own waste, and is much larger than the healthcare part of it. But the healthcare part of it is indeed growing out of control. And this is just govt healthcare costs, private costs add a whole bunch more into GDP. The whole thing is absurd and if it continues it may lead us to ruin.
850 to 2000 over 40 years is a TERRIBLE rate of return. That doesn’t even keep up with inflation.
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Well, as usual, results often depend upon timing/luck:
I first purchased significant gold in mid 2004 at $380, right after I joined TMF and took my investing back from the “pros” on Wall Street.
My gold CAGR is around 10% as of now.
Great return? Not really-about the long-term average of the stock market with dividends.
However, I don’t look at gold as a normal “investment”; rather financial panic insurance, which (to me, at least} has some value.
Are gold (and silver) right for everyone? Nope.
But there is no one right way to invest for all…just the right way for me, with my specific financial circumstances, goals and risk tolerances.
Cheers!
Murph
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Yup - you got my point! BRK was also about $400 in 1980 (that’s the “A” shares since the B didn’t exist then) and it’s now about $500,000. Not fair to compare to gold I suppose, but even the S&P is about 40X what it was in 1980.
Pete
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Hawkwin nailed it.
d fb
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Depends on where you start and finish. If you go from 1971 to now Excel tells me that it has returned over 8% compound interest. It has little or no counterparty risk.
Precious metals make up about 10% of my portfolio which I’m happy with - I do know one person where it is 90% of his portfolio. Unlike me, he still works, and doesn’t need any investment income. He also comes from country far away that went through a currency collapse so I suppose he sees things differently.
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That’s the nice thing about wide equity index investing. It doesn’t depend much on luck, and it doesn’t depend much on timing, it depends a lot more on time. Invest for 10 years, you’re likely to do ok, invest for 20 years, you’re likely to do more than ok, invest for 30+ years, you are almost guaranteed to do more than ok.
That’s nice, but obviously we can’t judge an investment by the performance of the best individual results, we have to judge it by the average individual results. My TMUS CAGR is 21.53% (~10 years), my UNH CAGR is 16.59% (~20 years). My AAPL CAGR is 32.24% (~15 years, including lots and lots of options trades throughout). That doesn’t mean that anyone should replicate my portfolio today and expect similar results going forwards. Like you said, it all depends on timing. And most people don’t have particularly good timing.
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Actually, what makes US government debt good is the government’s Constitutional authority to tax that GDP.
Steve
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