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Comment by roland35 | Hacker News Reader

It looks like GLD has underperformed SPY overall, with a lower Sharpe ratio (risk adjusted return). Gold did have a good run between 2010-2013 though!

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&t...

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When investing the same amount every month (dollar-cost averaging), the difference becomes even larger. Using your portfolios, but adding $250/month in addition to the initial investment of $10k, you end up with $128k with gold and $207k with SPY (total investment ~$85k): https://www.portfoliovisualizer.com/backtest-portfolio?s=y&t... (with QQQ, it'd be $380k)

Comparing one-off investments is very dependent on the start date, and dollar-cost averaging more accurately models what people can actually do and which returns one may be able to expect. Who has a large lump sum laying around to invest rather than investing a portion of one's income every month/quarter?

Yes that is a good point, and is something to think about when comparing investments. Everyone's investment goals are different so make sure you understand what your goals are when reading research!

Are SPDR GLD shares the same as real gold? I read somewhere that ETFs sometimes have to use special tricks to try and match commodity prices....

Even if the ETFs are completely honest, there have been bars of fake gold in circulation in the news since 2000

https://www.reuters.com/article/us-gold-swiss-fakes-exclusiv...

https://www.celticgold.eu/en/gold-university/fake-gold-bars....

Thanks for setting that up!

Though looking at the low correlation between gold and the rest of the market, it looks like you did make an argument there for gold as part of a diversified portfolio.

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