Why gold is a bad investment.

The other day, my mother called me with a message that my grandmother wants to “secure the future of her great-grandchildren” with an “investment” in gold. I called my mom back and told her that was a terrible investment. Here’s why: since 1833, gold has had the incredible interest rate of 1.97% per year while the consumer price index, aka, “inflation” increased at a rate of 3.29% per year, since 1913. But that’s not such fair comparison, so how about comparing gold and CPI since 1975. That comes out to be 4.35% and 4.35% for inflation and gold, respectively. Good investment? I think not! Gold’s barely kept up with inflation. Something that I consider an investment performs better than inflation *after* taxes.