We came across a great chart today on Zerohedge.com, which provides the annual returns and volatility of gold versus other asset classes over the past 80+ years. The mainstream media is typically not a proponent of gold, oftentimes citing extreme volatility as one of the downside risks of investing in gold, but as we can see from the graph, the downside risk of stocks historically has been twice as volatile as gold. The upside potential of gold has also proven to exceed the returns of the other three major asset classes highlighted in the chart.
While there is clearly risk associated with most, if not all investments, this chart may help to dispel the myth that gold is an extremely risky asset class. While there are many different ways to invest in gold, including mutual funds, ETF’s, gold mining stocks, etc., we recommend investing in physical gold bullion in the form of coins, bars and rounds. Not only do we recommend investing in gold bullion, but to also take physical delivery or possession of your items.
If this chart has convinced you to invest in gold coins, bars, or rounds, we recommend that you click this link and read the five attributes that define successful gold and silver coin buyers. This should help you to avoid many of the common pitfalls that plague gold and silver coin investors.