Armageddon wrote:To everyone who says #gold is a bad investment: If you bought gold 10 years ago, you would have received 7% annualized return every year in CAD terms, says Kitco’s #PeterHug |

Citation? Showing his assumptions and work? Because this number (7% annual appreciation) makes NO sense to me given it looks like the US$ only appreciated roughly 7% vs. the Canadian dollar in the past ten years, and the figure, after inflation, is MUCH lower against the US$. (See below).

https://tradingeconomics.com/canada/currencyAlso, let's NOT pretend a 10 year snapshot is meaningful compared to looking at returns for nearly a century. Especially with volatile financial markets.

So gold is roughly $1300 now, in US dollars. (Rounding to nearest $100 -- just looking for a back-of-the-envelope picture here).

90 years ago, (going back to 1929, when good data generally became available for the biggest financial markets) gold was roughly $300 in US dollars -- inflation adjusted.

So the 90 year return was roughly (1300 - 300) / 300 = 1000 / 300 or 333 percent. So that's well under two doublings. So by the rule of 72, that's WAY under 2% return annually. Using 1.3% return would get us a doubling in 55+ years (72 / 1.3 = 55.4).

So 55 years for the first doubling, and then 35 years (to 90 years) to be 70% into the next doubling. 35 / 55 = 64%. So 1.3% is in the ballpark.

Somehow I think the stock market returns of roughly 7% after inflation, looking over 5 TIMES the return of gold for the past 90 years looks significantly better. https://www.macrotrends.net/1333/histor ... year-chartAnd why boost the gold returns by using Canadian dollars? Who cares about Canadian dollar purchasing power outside of Canada? For the US dollar, gold looked like $1127ish in Feb 2009, and $1316ish now. So that gives a 10 year return of (1316 - 1127) / 1127 = 16.8% in 10 years, so let's call in 1.7% annualized in USD terms, inflation adjusted.

And notice how this 10 year period you chose is in the ballpark of the longer term average for Gold's performance?

...

Sanity checking, the rate of return formula I looked up is the same thing I used.

https://www.investopedia.com/terms/r/rateofreturn.aspI used Microsoft's CALC for all my figures.

If I messed up on the math (it's late, and I'm quite tired), please let me know.

Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.