The stock purchase power of gold is volatile.
US since 1968 when President Nixon finalised the breaking away from a gold standard has seen gold arithmetic yearly average 11% with a standard deviation of 25% (Pythagorean CAGR approximation 8.14%), min -25%, max +99%; Stocks averaged 10.9% with a 16.9% standard deviation (CAGR approximation of 9.56%), min -35%, max +38%
The stock purchase power of gold averaged 3.7% with a 34% standard deviation (CAGR -2%), min -36%, max 106%.
50/50 yearly rebalanced stock/gold averaged 10.9% with a 13.6% standard deviation, CAGR 10.1%, min -15.8%, max 62.3%.
50/50 stock gold yearly rebalanced produced a higher CAGR (actual gain) than 100% stock and did so with less risk (better min).
Whilst gold pays no dividends and alone broadly paces inflation, the stock purchase power of gold is volatile enough to open up the potential to trade gold and potentially yield a 'dividend'. Deploying gold to buy stocks when the stock purchase power of gold is high, selling stock to replenish gold when the stock purchase power of gold is low (stock purchase power of gold is high), will help bolster gold productivity (dividends). i.e. gold is a reasonable 'reserves', especially when periodically deployed and later replenished in a timely manner.
However the cycles can be long/slow and potentially deep/tall.
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