Smart Financial Planning

Gold has been doing pretty well lately and stirring up interest. But let's look at its history.

From 1971 to 1979, gold was up nearly 1,300%. WOW! That was good enough for a nine-year annual return of 33.8% per year. Some would say gold was an incredible inflation hedge in the 1970s.

Others argued that those massive returns were just playing catch-up from the decades in which the government artificially held the price down.

If you look at the gains since 1980, they tell a very different story. From 1980 to 2023, gold was up just 3.2%/ year. That lagged the returns for stocks (+11.7%), bonds (+6.5%), and even cash (+4.0%).

In that same period, the annual inflation rate was 3.2%. So gold had a real return (inflation-adjusted) over a 44-year period of an unspectacular ZERO.

So, what do you think about investing a bit in gold bars or an ETF?

Here's a very interesting chart and commentary by Bespoke for you.

As of yesterday morning, the 101 stocks in the S&P 500 that pay no dividend were up an average of 20.7% YTD, while the 100 S&P 500 stocks with the highest dividend yields were actually down an average of -3.2% YTD. Remember, the S&P index is up more than 17% YTD, so anything down on the year is massively underperforming.

Below is a table listing the 29 stocks in the S&P 500 that had the HIGHEST indicated dividend yields (5%+) yesterday morning. As you'll see at the bottom of the table, these 29 stocks are down an average of -8.37% YTD on a total return basis, so the 5%+ dividend yields are being more than erased by falling share prices for many of these names.