Go ahead and follow the link to The Paradox of Gold by Kurt Brouwer. I used to think of gold as a good investment vehicle. Whatever happens, I was under the belief that gold will always come to the rescue. Apparently it is not so.

For example, gold is currently at $707 oz., which is almost triple its value from 2001, yet gold still has not reached its historical peak of $875, which was set in January 1980. Admittedly, that peak was a very short-term one and gold quickly settled back down to $700 or so later in 1980.

So, gold has not even kept up with inflation over almost 3 decades, though I would have made a 300% return if I invested in gold 2001 😦 I do not know if all the prices mentioned are in today’s dollar terms or respective year’s dollar terms. If it were the latter case, it would be even worse, wouldn’t it?

Real estate is not all that it is cranked up to be. Going by the trend shown, there have been 2 extra ordinary run ups in the real estate market. This is for the US. Is there anything similar to this for India? Any pointers?

Neither is gold.

Ofcourse, there is no denying that quite a lot of folks who have profited from both. But is that due to their innate intelligence or is it pure, sheer dumb luck? Whats a poor schmuck to do?

Update: FYI, on the equities front, BSE Sensex outperformed Indian IT majors in the first half of FY 2007-08. A dire portent? Ofcourse, I mean an opportunity for value investors to scoop up as much stake at the trough for eventual shoring up tick.

BTW, is there any way to specify start and end dates in the URL itself for this Yahoo! Finance charts?