Tuesday, March 27, 2012

Is gold really the best hedge against inflation?

With so much talk around gold and inflation, why don't we look at how the major commodities and the S&P500 index have performed through this big inflationary stretch since 1983. Below are percentage returns off front month futures values for the period, Mar. 1983 - Mar. 2012.





Data source: Wikiposit

It looks like gold did not outperform any other commodity significantly, and if you're long inflation, the most expectedly profitable (and highly volatile) investment would be in the stock index.

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