“Gold’s investment performance has dominated this decade.  How come so few people have noticed...?”

No fooling!  It doesn't matter which currency you earn, spend or invest, gold bullion has been the best-performing asset class bar none this decade.

Gold has dominated the last nine years for investors, smacking everything else in the nose and pulling their ears, too.
So when finance advisors and hacks finally come to glance back at this decade, they will see it as the “decade of gold.”  Just as U.S. technology stocks ruled the 1990s, rising 11-fold on the NASDAQ.  Just as Japanese exporters owned the 1980s, up more than six times over on the Nikkei-225.  Just as gold itself dominated the 1970s.

Of course, this is hardly a unique insight among contrarian (i.e. bloody-minded and history-guided) investors.

At least one tech stock heretic – Bill Bonner of The Daily Reckoning – called gold the “Trade of the Decade” just as the decade began.

Even though Bill’s call has come good (and come good better even than his blushes would hint), the mainstream investment industry still refuses to notice the cold, hard fact of gold’s decade-beating performance.

Take the out-performance of gold for U.S. investors, for instance.  Go on and take it because no one in the financial media wants to acknowledge it.

Yet this decade, only residential real estate managed to beat gold consistently (excluding costs as well as rentals), right up until granite and plasterboard began to flatten and crater in spring 2006.

Housing has since fallen so hard, it barely matches the risk-free return offered by cash since the start of the decade.  Yet that risk-free return in itself stands one-third below the previous five-decade average with the 10-year Treasury yield paying just 4.6% per annum before tax and inflation.

As for equities, re-investing every red cent of your dividends for the last 111 months would have added only 15% to the capital value of holding the S&P index today.  Sadly for buyers of the Big Double Top in U.S. equities, however, 15% hardly makes up for the index halving in price so far this decade.

This is an excerpt from May 2009 issue of Trader's Journal.