How Well Would You Have Done if You Had All Your Savings In Gold?


wealthymatters.comToday financial planners and daily wage earners speak of ” investing” in gold.In fact,given the dream run of gold in the last decade,most people can’t see past gold.Never mind that between last Diwali and this one there was no substantial increase in the price of the metal and that there was a fall in price in between and then it struggled to rise for a while.

There is no denying that in the dark days after the stock crash of 2008 and the poor economy thereafter, gold provided good comfort for all of us who worried about our financial health.And the fact that gold price rose fantastically in uncertain times was the icing on the cake.

Also gold has helped us hedge against inflation.Here is the link to an older post.

Gold also does superbly well when the equity markets and debt markets are giving negative real returns.

So should you just have all your savings and investments in gold?Far from it!Aside from the wealth tax you might be forced to pay every year on an asset that will give no returns till it is sold, at which point it might attract capital gains tax,keeping your money in gold over the last three decades wouldn’t have given you stellar returns.Check out the chart here:Long Term Returns from Gold Vs SENSEX While gold keeps up with inflation,just buying and holding it for long is unlikely to make you rich any time soon.So be certain to enjoy the touch and feel and beauty of your gold.

About Keerthika Singaravel
Engineer,Investor,Businessperson

3 Responses to How Well Would You Have Done if You Had All Your Savings In Gold?

  1. Pingback: Returns From Gold « Wealthymatters

  2. Alex Jones says:

    Gold is useful in my opinion as a useful backup system for trade and credit, but poor for investment purposes.

    • Gold is definitely good as an asset of the final resort and is invaluable during strife.It is also good as a savings instrument and as plain money when there is a lack of trust.
      As an investment product it depends on where you are in the wealth spectrum and just what sort of returns you want from your money.Adjusted for inflation if an asset doubles in value over three decades I can’t use it when I am trying to build a my fortune.If I start with 1 dollar and manage a 40+ CAGR for 40 years I can reach a billion.But if I did amass such a fortune perhaps I could do no better for my family than to leave a part at least in gold.More about it here:https://wealthymatters.com/2012/04/04/warren-buffetts-view-of-gold/

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