The Final Nail in the Cross of Gold

Ryan Murphy, Southern Methodist University
Eric Li, Southern Methodist University


There is little, if any, academic support for viewing gold as an effective primary investment strategy. Yet the idea persists in the public and has seen a revival in the years following the Great Recession. We perform a novel epirical comparison of gold with the S&P 500 from 1975 to 2016 in demonstrating how poor of a choice it is as a general strategy. A particularly striing finding is that gold outperforms S&P 500 (27% of the time) approximately as often as holding cash outperforms gold (28% of the time).