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Gold Marks Ten Stellar Years
By Patrick A. Heller

Now that we are a few days away from the end of a decade, expect to see many analyses showing the best performing assets over the past 10 years.

Over the past decade, the U.S. stock markets have turned in horrible results. The Dow Jones Industrial Average, Standard & Poors 500, and NASDAQ indices are all below their levels of 10 years ago, even ignoring the effect of inflation. While there are a select few individual stocks that have risen spectacularly, it is doubtful that any investors owned only such assets.

Treasury debt and high-grade U.S. corporate bonds have not really kept up with inflation, before having to pay income taxes on the “interest income.”

The residential real estate market rose, then gave back almost all of its gains.

On average, commodities have outperformed the inflation rate. Gold and silver are among the top performers among commodities. Ignoring inflation, for example, gold is up more than 14 percent per year for the decade. If you purchased physical precious metals and are still holding them, you have not been subject to any income taxes yet.

Different asset classes have market booms and busts. No one category is the constant top performer. However, the financial calamities that explain why the prices of gold and silver have been higher at year end for eight consecutive years have not been resolved. That is why, at the end of 2010, I fully expect the prices of gold and silver to be much higher than they are now – once again beating the effects of inflation.

Gold and silver have enjoyed shining results for the past decade. I look for even bigger increases in the year ahead.

 



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