Investors who owned stocks in the 2010s generally experienced some big gains. In fact, the SPDR S&P 500's (NYSE: SPY) total return for the decade was 250.5%. But there’s no question some popular investments did much better than others along the way.
Gold’s Difficult Decade
One lagging performer in the last decade was the SPDR Gold Trust (NYSE: GLD).
The GLD ETF started out the 2010s trading at around $110. For the first year and a half of the decade, gold prices were on fire, rallying from around $1,100 per ounce to as high as $1,923/oz in mid-2011.
Investors were scooping up gold on concerns that the massive stimulus action taken by the Federal Reserve during the financial crisis in 2008 and 2009 would eventually lead to significant inflation. Unfortunately for gold investors, that inflation never materialized and the $1,923 level represented peak gold prices of the 2010s.
Given the GLD trades mostly in-line with gold spot prices, the fund peaked in mid-2011 at $185.85, its decade high. Sluggish inflation numbers, 0% interest rates and steady economic growth over the next several years made gold an afterthought for many investors. The GLD fund drifted steadily lower over the next four and a half years, eventually bottoming out at $100.23 in late 2015.
For the next three-plus years, the GLD ETF traded in a mostly sideways range between around $110 and $130 before finally breaking out to the upside once again in mid-2019. The breakout coincided with concerns over the U.S. trade war with China.
GLD In 2020 And Beyond
The 2020 outbreak of COVID-19 and subsequent stimulus efforts once again have the GLD trading higher. The fund recently hit $170, its highest level since 2012.
Despite the recent rally, the GLD fund hasn’t been a particularly great overall investment in the past decade. In fact, $1,000 GLD shares in 2010 would be worth about $1,452 today.
The good news for GLD investors is that if the fund continues to follow its 2008 financial crisis pattern, it will not peak for more than two years after the stock market bottom in March of 2020.
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