Acta Oeconomica Pragensia 2016, 24(4):24-36 | DOI: 10.18267/j.aop.542

Investment in Precious Metals and Stocks

Zbyněk Revenda
Vysoká škola ekonomická v Praze, Fakulta financí a účetnictví (zbynek.revenda@vse.cz). Autor děkuje za pomoc se zpracováním dat Milanu Szaboovi.

Investment in various assets is associated with returns and risks. Especially precious metals are considered profitable and safe. Our analysis for the United States in 2005 - Q2 2015 demonstrates that it is very questionable. In this period, which included the US financial crisis, precious metals were coupled with a greater price volatility and lower real income than was the case with stocks in the DJIA index. Even over a sufficiently long period, gold and silver were not a good store of value with positive real returns. Moreover, demand deposits were also more profitable than gold in the longer term after 1980. In the long run, contrary to the beliefs, precious metals may not to keep good value in the physical form or in the form of securities linked to the price development of these assets. Commemorative and historical coins with a numismatic value are the most appropriate investment in precious metals. However, this investment is also associated with some risk.

Keywords: Dow Jones, financial crisis, gold, investment, market price, profitability, risk, silver, stocks
JEL classification: E42, G10, G23

Published: August 1, 2016  Show citation

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Revenda, Z. (2016). Investment in Precious Metals and Stocks. Acta Oeconomica Pragensia, 24(4), 24-36. doi: 10.18267/j.aop.542
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