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In Jan 1990, the S&P 500 was about 355, now about 1275 In Jan 1980, the S&P 500 was about 108

....but go ahead, keep buying gold.

It is one of the favorite arguments of the anti-gold crowd to focus on 1980. There is no difference in someone choosing to invest in Gold in 1980 than there is someone choosing to invest in stocks in 2000.

Below are two charts comparing Gold and the S&P 500. The first chart covers 1971 to 1983. The second chart covers 1983 to 2005. In both charts Gold is the green line and the S&P 500 is the blue line.

Looking at the first chart it can be seen Gold outperformed the S&P 500 by nearly 2000% (20x) into the beginning of 1980. After 1980 Gold entered a bear market and as you can see in 1983 was experiencing a bear market bounce. Was it a mistake in 1983 to be arguing the S&P 500 had underperformed Gold by nearly 1100% and anyone investing in the S&P 500 stocks was an idiot ? Was it a mistake to point out that the price of the S&P 500 was still below the price it had been 18 years earlier in 1965 and to stay with Gold for superior returns?

Here we are 22 years after that 1983 comparison. Anyone arguing the S&P 500 was an inferior investment to Gold based on the previous chart in 1983 missed a 1000% (10x) runup into mid 2000 and here we are in the midst of a bear market bounce in the S&P 500. Sure, Gold has underperformed the S&P 500 by 760% the past 22 years and it is still below the peak price of 25 years ago. But the S&P 500 underperformed Gold by 1100% going into 1983 and the S&P 500 was stil below the peak price set 18 years earlier. Anyone buying at those S&P 500 prices in 1983 made a killing the next 18 years.

Buy low and Sell High.... that is the name of the game folks.

GLDNGUN In my examples, I picked common everyday stocks...Exxon, Bud, and the indexes so if you just bought an S&P mutual fund. Notice I didn't include any tech stocks or whatnot. Although the price of gold in 1980 was the big high point, and a little unfair to use that price, I have a major distinctions. IT's been 25 years since gold peaked! 25 years after the March 2000 (when the DOW hit its peak), the Dow will be MUCH MUCH higher than 13000. Additionally, I picked another date, in 1990. Even the very very lowest point of the 1980s gold was at $300. SIMON SAYS WHAT You ALMOST make a convincing arguement, but there are 2 key details that are being ignored. Your chart begins in 1971 with the 2-tiered system, but in people weren't allowed to own gold until 1975, when it was already about $175/ oz. The second thing is you need to compile both timelines. If you bought gold in 1975 you have about 3 times your money today (not accounting for inflation). If you bought an S&P mutual fund in 1975, at about 90 and it's 1275, you'd have about 14 times your money.

GLDNGUN In my examples, I picked common everyday stocks and the indexes so if you just bought an S&P mutual fund. Notice I didn't include any tech stocks.

Although the price of gold in 1980 was the big high point, and a little unfair to use that price, I have a major distinctions. It's been 25 years since gold peaked! In 2025, 25 years after the March 2000 peak of the Dow, the Dow will be MUCH MUCH higher than its peak of 11722. Additionally, I picked another date, in 1990. Even the very very lowest point of the 1980s gold was at $300.

SIMON SAYS WHAT You ALMOST make a convincing arguement, but there are 2 key details that are being ignored:

Your chart begins in 1971 with the 2-tiered system, but in people weren't allowed to own gold until 1975, when it was already about $175/ oz.

The second thing is you need to compile both timelines. If you bought gold in 1975 you have about 3 times your money today (not accounting for inflation). If you bought an S&P mutual fund in 1975, at about 90 and it's 1275, you'd have about 14 times your money.