Wednesday, August 10, 2011

Hey Dave Ramsey

You keep telling people what a bad investment it is to buy gold. Let's take another look at the numbers:

Dow in 1971: 868
25 ounces of Gold in 1971: 875

Dow in 2010: 10,067
25 ounces of gold: 27,200 (1088 per ounce)

Dow today:10,862
25 ounces of gold: 44,550 (1782 per ounce)

So, since January of 2010, the Dow has increased at an annual rate of 5%, but gold has climbed at an annual rate of 40%. Since 1971, the Dow climbed at an average of 28.8%, and gold at a whopping 124.7%.

Of course, the Dow is adjusted, and the stocks on it are dropped as they become worthless, so the actual return on the Dow is much lower than that. Thanks Dave.

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