Inflation Beats Gold and Commodities But Not Equities

In today’s chart of the day, we show how investing in equities beats inflation over the long term. Of the four long periods we looked at, equity returns outshone gold in three periods.

Consider the 15, 20 or 25 year periods. In all three, equities outperformed gold and commodities, and proved to be a hedge against inflation. In the last 10 years, inflation was higher than the appreciation in gold, and gold beat equities. However, on an inflation-adjusted basis, Sensex returns still ranked the highest.

In conclusion, gold underperformed inflation in three periods and commodities did poorly in all four. That means inflation-adjusted returns from these two have been negative.