This Precious Metal Investment has TRIPLED Since 2000, but Nobody EVER Talks About It?

[Peter4Paul2016]

Looking over Precious Metals Prices From January 2000 to August 2014, Palladium has gone from @ $200 to $860+?!?!

Why do we not hear as much about Palladium along with other precious metals?

Precious Metals Charts For Gold, Silver, Platinum, & Palladium - Prices in Real Time

Palladium Bullion For My Self-Directed IRA?

[Zippyjuan]

Gold is up more. In January, 2000 it was $272 and today is about $1300- 4.7 times. Gold is easier to sell than paladium as well.

[Ronin Truth]

Looks like silver still wins!

[brandon]

FYI trippling in 15 years isn't anything remarkable. The stock market has performed better than that historically.

[Zippyjuan]

FYI trippling in 15 years isn't anything remarkable. The stock market has performed better than that historically.

DOW was about 11,000 in 2000 and is about 17,000 today. But over the longer run, stocks have tended to out-perform metals.

[helmuth_hubener]

FYI trippling in 15 years isn't anything remarkable. The stock market has performed better than that historically.

It depends on which stock market, and how far back historically you want to go.

Before Inflation

Before Inflation	1801-1900	1901-2000
Stocks	6.51%	9.89%

After Inflation/Deflation, aka Real -- THIS is what's important

After Inflation	1801-1900	1901-2000
Stocks	6.76%	6.45%

So, all during the 1800s, the average time-to-tripling was 16.8 years. All during the 1900s, the average time-to-tripling was 17.7 years. This was in the course of so much extreme volatility it makes these numbers almost deceptive in how incomplete a picture they give, but there you go.

So, at least for the US stock market, for the last 200 years of history, your statement is not correct.

[helmuth_hubener]

DOW was about 11,000 in 2000 and is about 17,000 today.

This was a particularly bad period for stocks and not typical.

Then again, the past 200 years had been extremely and anomalously good for stocks in the US and this is not typical of the performance one could expect over the past, say, 500 years in different stock markets around the world.

[Danke]

Those stock market returns, are those after fees and taxes?

[Zippyjuan]

This was a particularly bad period for stocks and not typical.

Then again, the past 200 years had been extremely and anomalously good for stocks in the US and this is not typical of the performance one could expect over the past, say, 500 years in different stock markets around the world.

It has also been an unusually good time for metals so definately not a typical period historically.

[tangent4ronpaul]

copper: http://www.infomine.com/investment/m...es/copper/all/

$0.60 lb in 2000
$3.18 lb today

was up to $4.50 lb in 2000

investing is trivial - it's called a penny jar...

-t

[tangent4ronpaul]

Here is the copper percent over the years along with a video link to RP having a hearing on the topic.

http://www.parkpennies.com/penny/penny.htm

-t

[helmuth_hubener]

Those stock market returns, are those after fees and taxes?

They are before fees and taxes.

Including fees would make the 1800s look worse, kind of, since index funds were not available then, so theoretically in order to get that 6.76% performance you would have to create your own, which is a very high cost indeed. It would also make the earlier 1990s look worse and the closer you get to the present look better -- fees have gotten lower and lower as time has gone on. This is just in theory, as in reality most investors do not choose the low-fee index funds, choosing instead to pay very high fees in order to underperform the index. That is, one only gets the advantage if one were to use index funds. As opposed to, say, putting it all in EuroPacific Capital.

Including taxes would make the 1900s look worse and the 1800s look much better comparatively. This is because, of course, the income tax and capital gains tax did not usually exist during that time period in the US.

Tl;DR: The fee situation has gotten much better over time, and the tax situation has of course gotten much worse over time.

[helmuth_hubener]

It has also been an unusually good time for metals so definately not a typical period historically.

True.

Of course, looking through history, historically-"typical" periods are few and far between.

[Danke]

It has also been an unusually good time for metals so definately not a typical period historically.

Or conversely, up until 1971, the gold price was atypical.

[Zippyjuan]

True since its price in dollars was basically set by the government.

[brandon]

So, at least for the US stock market, for the last 200 years of history, your statement is not correct.

Oh come on... why does my statement need to be normalized for inflation but the change in the price of metals doesn't? That's one hell of a double standard.

[Danke]

Oh come on... why does my statement need to be normalized for inflation but the change in the price of metals doesn't? That's one hell of a double standard.

$1.00 in 1971 had the same buying power as $5.86 in 2014.

Annual inflation over this period was 4.20%.

Has gold from $35 to ~$1300 kept up?

[Zippyjuan]

Let's check since 1900 since Helmut's stock chart does and end it where he does in 2000 so the numbers can be compared. Price of an ounce of gold in 1900: $21 an ounce. Price of gold 2000: $273. http://onlygold.com/Info/Historical-Gold-Prices.asp

Then let's do an inflation adjustment on the price. I am using this calculator since it goes back to 1900 (some only go back to 1913): http://www.westegg.com/inflation/

Results:

What cost $21 in 1900 would cost $433.20 in 2000.

That means that the 2000 price of gold in dollars when adjusted for inflation was $160 less or a loss of 41% of its value.

Same calculator, same initial price of gold but running it to 2013 (latest year available) and you get

What cost $21 in 1900 would cost $578.97 in 2013.

At $1300 an ounce, an inflation adjusted gain of $721 or 125%.

This is total returns- not average annual returns which Helmut's chart shows. For comparison to stocks, the Dow Jones in 1900 was 68 http://stockcharts.com/freecharts/hi...a19001920.html and today it is about 17,000 or 25 times higher (2,500%). This does not take into account stock splits or dividend payouts or taxes or transaction costs.

[helmuth_hubener]

Oh come on... why does my statement need to be normalized for inflation but the change in the price of metals doesn't? That's one heck of a double standard.

Actually, I have no double-standard. I simply passed on useful and accurate (to the best of my knowledge) information. Here was your statement:

FYI trippling in 15 years isn't anything remarkable. The stock market has performed better than that historically.

Your statement was two claims and one implication:

1) The tripling of an investment in fifteen years is nothing remarkable. You implied -- and perhaps really believe! -- that such performance is ho-hum, nothing special, and in fact below-average compared to, say, the average historical performance of the US stock market.

2) Historically, the US stock market has performed better than palladium has performed since 2000.

3) Overall point: contrary to the opening post, palladium is actually not performing all that great. The stock market performs better than this and does it all the time, decade in and decade out.

Since all three of these claims are false, I felt like I had something valuable to share in correcting them.

1) Tripling in fifteen years is over-performance. Performance like that would, in fact, be very remarkable for retail investors. Very few retail investors even get to par with index performance. If you get that kind of return (in real terms, of course, which is all that matters!), you are in a top elite sliver at the very top of the bell curve.

2) Historically, the US stock market has performed at about 6.6% for the past 200 years, according to the best numbers I have yet found. On the other hand, if you just took the OP at face value and didn't click the link or look into it, palladium has gone up 430% nominal -- $200 to $860 -- in 14.6 years. To make it real we subtract 38% for inflation and end up with somewhere around 10% annual returns. So, double-standard?

3) As a matter of fact if I were correcting the OP for accuracy I would have to up-correct his claims. It's almost quadrupled since 2000, and that's in real terms which probably the OP hadn't even thought to account for. Also, he could have made palladium look even better by choosing 2005, or even 2008, as his starting point. From 2008 it has gone from $158.50 to $877.50 today, a real return of 32% annually. So there. Palladium is performing great -- fantastically, wonderfully. Of late it is performing even better than the OP claimed. And, because you wanted to compare it to the stock market: it is performing significantly better than the stock market.

[helmuth_hubener]

That means that the 2000 price of gold in dollars when adjusted for inflation was $160 less or a loss of 41% of its value.

-0.46% real returns per year.

At $1300 an ounce, an inflation adjusted gain of $721 or 125%.

This is total returns- not average annual returns which Helmut's chart shows.

+0.72% real returns per year.

[brandon]

Your own data shows that the price triples in less than 15 years historically which makes my statement correct. We were never talking about inflation adjusted prices until you brought that up. I also never implied that stocks outperformed paladium in any specific time frame. I was talking about historical averages.

[helmuth_hubener]

Your own data shows that the price triples in less than 15 years historically which makes my statement correct. We were never talking about inflation adjusted prices until you brought that up.

Per the thread title, we were talking about Investment. Why anyone would talk about anything but real returns when talking about investments and their returns is beyond me.

As a matter of fact, the OP himself may have been talking about real returns, or "inflation-adjusted prices," since he found a quadrupling and called it a tripling. It's not a hard mental calculation that 860 is more than four times 200. In any case, I never stopped talking about real returns.

I also never implied that stocks outperformed paladium in any specific time frame. I was talking about historical averages.

The meaning of your post was clear. You compared the historical average performance of the stock market to the recent performance of palladium as outlined by the OP. You did this to show that the recent performance of palladium was not outstanding, and was in fact poorer than the historical average performance of the stock market.

But as a matter of fact, it is significantly better.

So your statement was false. You said, "The stock market has performed better than that historically." But in fact, the stock market has performed significantly poorer than that historically. Simple mistake. Now corrected. No harm done.

[brandon]

You're a bit too long winded and condescending for my taste so I'll probably let it drop. But if I can make one condescending comment too, I'd say, by all means please buy your rocks if you think they are going to be more valuable than the sum of human achievement. I'd say that's a little nutty but just my opinion.

[acptulsa]

True since its price in dollars was basically set by the government.

Backing a currency with gold is still not 'setting its price in dollars', my disingenuous friend. That makes it sound like the paper is the point and the gold is an afterthought. That's asinine.

You set the value of the money--if it's real money--by defining how much of the gold each bill represents. The gold is gold; the paper is but a receipt for some of it. This isn't the price fixing you describe at all.

Sound money isn't rent control. It's something sound used as money.

[Zippyjuan]

-0.46% real returns per year.

+0.72% real returns per year.

Thank you for calculating that.

[helmuth_hubener]

You're a bit too long winded and condescending for my taste so I'll probably let it drop.

Perhaps wise, but it would have been even wiser to in a manly, forthright manner admit your mistake and admit the obvious truth, as I have pointed it out to you. That would earn you respect among those who love truth.

But if I can make one condescending comment too, I'd say, by all means please buy your rocks if you think they are going to be more valuable than the sum of human achievement. I'd say that's a little nutty but just my opinion.

It's always wiser to address one's condescending comments to things which your communicee actually wrote. I do not own any palladium and of course would not advocate buying any for investment purposes. I would strongly recommend against investing in palladium. If you had ever read my long-winded posts in the many threads I have participated in regarding investing, you would know this. However, just because I oppose investing in palladium and support investing in the stock market does not mean I cannot point out facts and tell the truth.

[acptulsa]

You're a bit too long winded and condescending for my taste so I'll probably let it drop. But if I can make one condescending comment too, I'd say, by all means please buy your rocks if you think they are going to be more valuable than the sum of that human achievement which is allowed by the corporatist government and recognized by speculators. I'd say that's a little nutty but just my opinion.

FIFY

[Zippyjuan]

Backing a currency with gold is still not 'setting its price in dollars', my disingenuous friend. That makes it sound like the paper is the point and the gold is an afterthought. That's asinine.

You set the value of the money--if it's real money--by defining how much of the gold each bill represents. The gold is gold; the paper is but a receipt for some of it. This isn't the price fixing you describe at all.

Sound money isn't rent control. It's something sound used as money.

defining how much of the gold each bill represents.

Defining how much gold a note represents IS setting the price of gold in terms of those notes.

If the government decides that $20 represents an ounce of gold, the price of one ounce of gold is $20.

[acptulsa]

Defining how much gold a note represents IS setting the price of gold in terms of those notes.

If the government decides that $20 represents an ounce of gold, the price of one ounce of gold is $20.

No.

Either the money is fiat and the government is trying to fix its value through force, in which case the official price of gold is twenty dollars (but you can only ever find gold on the black market, and you have to pay more to get it), or there is a gold standard which makes saying a twenty dollar bill is the price of an ounce of gold stupid and utterly meaningless because a twenty dollar bill is a receipt for an ounce of gold.

You're trying to convince us that our personal checks are money. They are not. If there is no money in the checking account, our personal checks are utterly worthless pieces of paper. There's a reason they went to the trouble to inscribe all that verbiage on the money when we were on the gold standard: 'This is to certify that there is on deposit in the treasury of the United States of America Twenty Dollars in Gold payable to the bearer on demand'.

You can talk about price fixing. You can talk about paper money as receipts. But to describe the gold standard as if it were price fixing is disingenuous, misleading, and downright dishonest. It is as dishonest as bouncing a check is.

[Zippyjuan]

or there is a gold standard which makes saying a twenty dollar bill is the price of an ounce of gold stupid and utterly meaningless because a twenty dollar bill is a receipt for an ounce of gold.

SO a gold standard would be stupid.

But to describe the gold standard as if it were price fixing is disingenuous, misleading, and downright dishonest. It is as dishonest as bouncing a check is.

Would the price of gold deviate much from the government price- say $20 of my example? If my "gold receipt" can be exchanged at a bank for one ounce of gold, would I pay a dealer more than that to buy an ounce from him? If the price does not vary significantly from the "official exchange rate" then the price is fixed.

'This is to certify that there is on deposit in the treasury of the United States of America Twenty Dollars in Gold payable to the bearer on demand'.