Gold is also a poor place to put your money. The long term average is both volatile and underperforms most indexes.

https://www.macrotrends.net/1333/historical-gold-prices-100-...

Gold is not in price discovery because its been around for so long and already had its ETF moment (which is why its stagnated since that massive run). But gold has always performed cyclically. Long term (very long term) its done quite well. Not my cup of tea but it had its place. Going forward I expect btc will disrupt it and flip its value (JPM making the same call).

Over the last 100 years, you'd have done significantly better by putting your money into an index fund -- and had less volatility. As far as I can tell, gold is just a lousy place to keep your money.

What kind of long term are you talking about?

I agree with you in theory. However, over the course of 100yrs you also need to worry about entire countries disappearing. If your index fund is denominated in the wrong currency, held by the wrong custodian, or has too many companies based in falling countries, you might be in trouble. Meanwhile, Gold has survived a thousand generations.

In a hundred years, there can be wars, reparations, and lots of damage to equity.

I think some distinction should be made on store of value (win for gold) vs asset appreciation (win for stocks), especially once you start talking about 100years.

When your country collapses, you tend to find practical matters that make gold a poor store of value, unless you dissolve your gold bars in acid when the war starts.

My impression is gold is largely seen as a low risk inflation hedge rather than a growth investment. A better comparison would be a savings account or maybe municipal bonds.

Did index funds exist 100 years ago? I'm pretty sure passive investing is a more recent phenomenon.

>In 1926, it developed a 90-stock index, computed daily.

https://en.wikipedia.org/wiki/S%26P_500#History

This is just a technicality however. In practice you have to buy stocks according to the index yourself or invest into a fund that mirrors the index for you. The secret sauce in ETFs is that algorithms do the work of the fund manager and thus reduce costs.

Price discovery happens constantly and continuously. It's supply and demand.

Perhaps that means gold is now cheaper than the index and thus will perform better than the index?

Germany has weird taxes. There there is a 25% tax on stock market returns. But no tax on gold sales. Nor on Bitcoin sales. Although silver is taxed.

Bitcoin is mostly littered with bubbles and a hidden deflationary trend. Right now the 300% gains are just part of a bubble that is going to pop but Bitcoin will recover to a fraction of that, however that fraction is still higher than it started off. The long term gains per year are much smaller than the bubble gains. I wish people would stop "bubbling" Bitcoin and actually look at the long term trend like people do for stocks. At least I hope people research their stocks and ignore the last 2 years of gains when analyzing a stock or index fund.

Gold has stored value for a little bit longer than bitcoin, and the volatility isn't really even within orders of the same magnitude.