- Cherry-picking historical performance that favors or disfavors gold is flawed.
- Investors are better served by understanding the place and role of gold if they decide to own it.
- The "DeLegge Framework" eliminates debate about the proper context for investing in gold.
For a second consecutive year, Jason Zweig at The Wall Street Journal has referred to gold as a "pet rock." Without much surprise, gold bugs immediately came to the rescue of their beloved metal by rebuking Mr. Zweig's view from every conceivable angle known to mankind. In case you didn't get the memo, gold bugs are the de facto public relations department for precious metals.
Using the SPDR Gold Shares* (NYSEARCA:GLD), which was introduced in 2004, as a barometer for gold's performance, here's how gold has done over the past few years compared to major stock and bond benchmarks.
GLD (NASDAQ:GOLD) +102.85%
SPY (S&P 500) +106.31%
BND (Total US Bond Market) +49.61%
SPY (S&P 500) +79.57%
BND (Total US Bond Market) +19.33%
SPY (S&P 500) +35.59%
BND (Total US Bond Market) +13.54%
SPY (S&P 500) +6.69%
BND (Total US Bond Market) +6.63%
While historical performance is often used as a tool to prove or disprove the validity of gold investing, it's a tool with limitations. Why? Because...