Some investors favour shares/equities over gold, as shares would rise more. Shares are said to be a good investment, especially in the long term. But is that even true? Let’s make a comparison.
Let’s take the performance of the MSCI World Total Return Index, which represents the global equity market. The comparison is tough because the proportion of US equities that have performed well in recent years is very high.
The index takes into account dividends, which are reinvested after distribution.
After all, unlike holders of gold, shareholders receive dividends – we don’t want to misapply anything in the comparison. The comparison begins with the start of the index at the end of 1969, which is also the longest period for which a comparison of gold and equities makes sense, as the gold price was not fully liberalised until 1971.
The performance of global equities over the period from the end of 1969 to mid-December 2024, and thus over the past 55 years, averaged 9.89 per cent annually. That is a very respectable result.
The returns on fixed-interest securities and even more so on bank deposits were far lower.
Gold has an excellent performance record!
What is the situation with gold? Gold has risen by an average of 8.23 per cent per year over the same 55 years.
That’s a little less, but still quite respectable! Taking the tax situation into account, the ranking can even be reversed in favour of gold, as German private investors, for example, have to pay taxes of over 25 percent on shares.
This noticeably reduces the real achievable performance for equity investors. Overall, gold has nothing to hide when it comes to long-term performance.
Five special characteristics of gold
However, investors are not only interested in past performance, but also in the prospects for the coming months and years. To assess this, it is important to realise what gold represents in economic terms.
Let’s take a look at five important characteristics of gold:
- Gold is a liquid store of value that can be easily transported. In this respect, it differs from other tangible assets such as shares or property.
- Gold has no counterparty that can go bankrupt. It does not lose its value due to a bank failure or in a financial crisis. This makes it safer than bank deposits.
- Gold cannot be multiplied at will by banks, central banks or governments. It therefore protects against inflation.
- Gold is independent of states. States can disappear, declare their currencies worthless or confiscate them, as in the case of the sanctions against Russia.
- Gold is timeless. Most of the currencies of the past have long since disappeared. The gold of a gold coin from past states of earlier centuries still has value today.
Gold therefore has very special characteristics. As a liquid tangible asset, it competes directly with credit-based currencies such as the Euro or US Dollar, without exhibiting their negative characteristics in the form of the risk of currency devaluation, bankruptcy or simple refusal to perform.
Gold benefits from a demonetisation environment
Unfortunately, currency devaluation is exactly what threatens in the coming years. Globally, countries, companies and private households are highly indebted and deficits are rising.
This is the environment in which gold typically rises. This can lead to price spikes that cause gold to rise significantly more than the inflation rate would suggest.
The reason for this is that in times of high currency devaluation, many funds flow into the “safe haven” of gold.
Conversely, an inflationary environment poses a threat to share prices. This is because interest rates rise with inflation.
In fact, interest rates have been on the rise since 2020. But “rising interest rates are poison for the stock market”, as the old saying goes. They put pressure on share prices with a time lag.
Accordingly, share prices fell in the last major inflationary phase of the 1970s, adjusted for inflation. The price of gold, on the other hand, increased more than twenty-fold. Expect a similar scenario in the coming years and position yourself for a sharp rise in gold prices!
How can you buy precious metals cheaply and store them safely?
Elementum Deutschland GmbH, based in Sindelfingen (Germany), specializes in trading physical precious metals. Customers who purchase precious metals from Elementum Deutschland (or one of the other national Elementum companies in five European countries) can store them in the renowned high-security vaulting facilities in the St. Gotthard Massif in Switzerland at Elementum International AG.
Of course, you also have the option of purchasing gold and silver directly and having it delivered to your desired address. However, storing silver in the so-called open duty-free warehouse (“offenes Zollfreilager”) at St. Gotthard offers decisive tax advantages:
- The 19% value added tax customary in Germany is completely waived on purchases and sales – a considerable price advantage that effectively secures you 19% more silver for your money.
- If you store your silver in this high-security vault, you can sell it back to Elementum Deutschland GmbH at any time – without any bureaucratic hassle and also without VAT, as the trade takes place within the duty-free warehouse. You will receive the funds via bank wire.
- VAT is only payable when you physically remove the stored silver – either by picking it up in person (after prior notification) or by having it shipped to your address.
More silver, more return
Thanks to duty-free storage, you receive 19% more physical silver when you buy. This additional amount also participates in the performance of the silver price if it rises – a leverage effect that significantly improves your return opportunities.
Secure your storage space now – free of charge and without obligation
Register now for a storage space in the St. Gotthard high-security vaulting facility and receive free access to:
- our General Terms and Conditions (GTC)
- current fee tables
- annual audit reports from the auditing company BDO AG
- transparent proof of use of funds
- family discount information
- the popular children’s program “Schatz4Kids” (“Treasure4Kids”)
- as well as numerous other documents and information on storage, purchase, and resale, as well as the ratio “switching” strategy.
Register now: https://silberbar.elementum.de/
Tip for discounted entry: Enter the promotional code “50” (“Aktionscode“) and the “Vermittler” number 1000166 when registering to receive a 50% discount on the storage space setup fee.
Important: Registration is non-binding and does not commit you to anything – but it is your first step towards an independent and crisis-proof precious metal investment.
Elementum is a second-generation, owner-managed family business. Trust, consistency, and long-term thinking are at the heart of our philosophy. The Board of Directors of Elementum International AG is composed of internationally renowned experts in the money and precious metals markets, including economists, analysts, university professors, and precious metals specialists. This in-depth expertise forms the backbone of our actions—for your security, your assets, and your future.
About the Author
Dimitri Speck
Member of the Board of Directors of Elementum International AG
Dimitri Speck specializes in analyzing the financial system and financial markets. He is the author of a stock market newsletter and the books “Geheime Goldpolitik” (“Secret Gold Policy”) and “Die größte Finanz-Blase aller Zeiten” (“The Greatest Financial Bubble of All Time”). His work on commodities, precious metals, and seasonality was awarded the German Precious Metals Association Prize in 2013 and the Scope Award in 2018. Mr. Speck is the editor of the website www.seasonax.com on seasonal studies.
Contact
Rockstone News & Research
Stephan Bogner (Dipl. Kfm., FH)
Müligässli 1, 8598 Bottighofen
Switzerland
Phone: +41-71-5896911
Email: info@rockstone-news.com
Disclaimer: This article reflects the personal opinion of the author. Elementum assumes no responsibility for the accuracy of the content and accepts no liability for its use. This article may contain links to external third-party websites. Elementum is not responsible for the content of these external sites and expressly distances itself from all information provided there. At the time the links were created, no unlawful content was identifiable. This article does not constitute a recommendation to buy or sell. Elementum International AG is a Swiss company that specializes exclusively in the storage of physical precious metals in a high-security vault facility located in the St. Gotthard mountain massif in Central Switzerland. The Board of Directors and Executive Management of Elementum International AG have been selected solely based on their professional expertise and long-standing experience in precious metals markets. As these individuals may also be professionally active outside their roles at Elementum International AG, the company has no influence over their external activities and respects their right to freedom of expression. Therefore, the views expressed by persons working with or for Elementum do not necessarily reflect the opinion of Elementum International AG. Investments in precious metals are subject to risks, including those specific to the structure of this market. Please read our full risk disclosures and consult a licensed financial advisor before making any investment decisions. Neither the author, Elementum International AG, nor Elementum Deutschland GmbH assume any liability for actions taken based on the information provided. Past performance is not indicative of future results.
