Gold Versus Stocks

Gold bugs like to point out that gold has risen against the major stock indicies. A better comparison, however, is to look at gold versus the Wilshire 5000 Total Return Index (^DWCT), which includes almost all stocks and their dividends.
Here’ a look at gold (the gold line, right scale) against the Wilshire 5000 (the blue line, left scale). I made it so both scales match at 12 to 1.

Gold has indeed done well, but stocks have certainly held their own. Plus, you can see how much less volatile stocks are. Gold is down about 10% from its peak of last year. The peak almost perfectly coincided with this New York Times article. I should have known.

Posted by Eddy Elfenbein on July 9th, 2007 at 10:59 am

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