From 1980 to 2001, gold has an annual real return of -6%. It still does not have a positive real return to this day from that peak in 1980. Since this is a TIPS vs gold thread, In the late 90's when TIPS were introduced, you could have bought a TIPS bond with a guaranteed 3.8% real for 30 years. If inflation is what you are hedging against and you can get a zero or positive TIPS fixed rate, TIPS are vastly better. There may be other reasons to hold some gold though such as if you think the US gov't will default on its debts in the future or perhaps to protect against deflation which gold may be better at doing.I think that number can be whatever you want it to be, tbh, depending on the timescale you use.The correlation of gold price to inflation = 0.16 last 50 years.
Sites like PV may be looking at month-to-month correlation – which is completely meaningless unless your typical holding period is a month.
I do think correlation matrices are truly a case of reducing complex relationships to utterly meaningless metrics.
Statistics: Posted by TimeIsYourFriend — Sat Apr 20, 2024 6:02 am — Replies 30 — Views 1269