PDF download comparing gold returns

http://www.nber.org/papers/w18759.pdf

"The covariances of gold’s real rate of price change with consumption and GDP growth rates are small and statistically insignificantly different from zero. These negligible covariances suggest that gold’s expected real rate of return—which includes an unobserved dividend yield—would be close to the risk-free rate, estimated to be around 1%."

This sounds reasonable to me. My comparison has always been the price of land in gold ounces. While it varies over time, in our area at least, land priced in gold is not that much different from the time my family bought it from the rail road which was land deeded to the rail road to encourage them to build the rail road infrastructure across the nation (as opposed to homestead land).

Which brings out the point, gold is not a way to make money. It is a store of value. The land makes money because it produces something. Gold does not. A person can speculate on gold price appreciation just like a person can speculate on land price appreciation. But that is speculation.

Once a person understands what gold is and isn't, then he can decide if there is a place for it in his portfolio. For most of the people the answer will be no.

John