Previously, I posted historical gold prices back to 1791 and annual gold returns before inflation. In this post, I am comparing the average compound rolling returns
(adjusted for inflation) for both stocks and gold over 1, 5, 10, 15, 20, 25, 30, 35 and 40 year intervals.
For the period 1928-2012, the average annual compound real return of stocks = 6.0% and gold = 2.2%. However, the price of gold was controled by the government until the mid-70s when the US finally abandoned the gold standard. For the period 1976-2012, the average returns were stocks = 6.7% and gold = 2.5%.
Gold Data from MeasuringWorth. Stock data from Damodaran Online | Updated Data | Historical Returns on Stock Bonds and Bills - United States. CPI from Measuring Worth.
Graphs created in OmniGraphSketcher then pasted into Illustrator.
22 minutes ago
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How risky is gold compared to other assets? For most of the of the United States’ history gold’s price was set by the government (given that the value of the US dollar was often pegged to gold). In this graphic, I have taken the annual price change of gold back to 1928 and compared it to the returns on stock, bonds and t-bills.
Since the early 1970s when the US completely abandoned the gold standard, gold’s price changes has made it very volatile and if we look at the annualized compound return from 1976-2012 (gold 6.6%; stocks 10.9%; 10-year bonds 8.1%; 3-month t-bills 5.1%). Gold returns was just little better than 3-month t-bills. However if we look at the annualized return for 1928-2012: gold’s return of 5.3% beats t-bills at 3.6% and bonds at 5.1% but still underpreforms stock’s return of 9.3%.
Gold Data from MeasuringWorth.org. Stock and treasury bonds data from Damodaran Online | Updated Data | Historical Returns on Stock Bonds and Bills - Untied States. CPI from Measuring Worth.
Graphs created in OmniGraphSketcher then pasted into Illustrator.
6 days ago
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In 2008, I graphed the annual US price of gold. In this post, I revisit gold but this time I graphed the market price along with the real price (adjusted for inflation using 2012 dollars). When you take the inflation into account, the annual price of gold has spiked over $1,700 twice since the US left the gold standard, once in 1980 and again in 2012.
In this graphic, I briefly touch upon the history of gold standard. Beginning in 1792, the US Mint pegged the dollar to gold and silver. In 1900 the US went on the gold standard (i.e. the dollar was pegged just to gold). During this time, except for monetary crisises, the market price for gold matched the “official” price set by the US government. In the 1970s, the US finally left the gold standard and allowed the dollar to float freely on international currency markets.
Data from MeasuringWorth.org . Graphs created in OmniGraphSketcher then pasted into Illustrator.
2 weeks ago
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Here is a simple graph comparing the variation of annual returns for US stocks, US 10-year bonds and US 3-month t-bills. I have included both nominal returns (not adjusted for inflation) and real returns.
Stocks are of course the most risky of the three with both the highest and the lowest returns then comes 10-year bonds and finally t-bills with the smallest but the most consistant returns. However, after 3-month t-bills are adjusted for inflation there are many years you will “lose” money. And in years with deflation, your real return will be larger than the nominal return (i.e. you did better holding stocks in 1933 when you take into account the effects of deflation in that year while 1954 had the highest nominal stock return).
Return Data from Damodaran Online | Updated Data | Historical Returns on Stock Bonds and Bills - Untied States CPI form Measuring Worth. Created using OnmiGraphSketcher.
1 month ago
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I dug up at the US Census Bureau serveral reports about family and individual income and created a series of graphs plotting the income distribution of households under $100,000 a year adjusted for inflation. (Pages 17, 18, 19 from my Income Guide)
I am defining middle-income households as $30,000-$80,000. One of the stories these graph tell is that for 20+ years after 1945 more households entered the “middle class”. However, over the next 40 years, the percent of middle-income households shrank in part because the percent of households with more than $80,000 a year grew.
Graphs created in OmniGraphSketcher and annotated in Illustrator. Data from the US Census. You cake a look at some of the older reports they have online here:
US Census Bureau. “Families and Individual Money Income in the United States: 1945. Table 2.” September 2011. http://www2.census.gov/prod2/popscan/p60-002.pdf.
———. “Income of Families and Persons in the United States: 1950. Table 1.” September 2011. http://www2.census.gov/prod2/popscan/p60-009.pdf.
———. “Income of Families and Persons in the United States: 1960. Table 5.” September 2011. http://www2.census.gov/prod2/popscan/p60-037.pdf.
———. “Income, Poverty, and Health Insurance Coverage in the United States: 2010. Table A-2.” September 2011. http://www.census.gov/prod/2011pubs/p60-239.pdf.
1 month ago
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Let me begin with a disclaimer. This industry includes firms that are pure internet-based activities, like hosting and web searches as well as ones that are being disrupted by the internet like newspapers and broadcasting.
Starting with the Information industry’s share of GDP (from page 119 of my book), while it has grown over the last 50 years it is still around 4% of GDP as of 2010.
However, the Information industry represents only 2% of the 170 million jobs in the US economy.
In this treemap of all occupations in the US economy, each occupation is represented by a rectangle, the bigger it is the more jobs it has. Look at the upper right corner to see Information’s share of jobs. The dark red represents the percentage of jobs loss and the only area more red than the Information sector is Manufacturing.
Now drilling into just the Information industry, some of the bigger occupations are: editors, computer software engineers, customer service representatives, telecommunications equipment installers, reporters and finally producers & directors. Out of that list only producers & directors had job growth between 2001-2011.
If you are interested in the income of these occupations or want to explore additional industries take a look at my book.
Data used in these graphics was based on BLS Occupational Handbook (provided by
EMSI) and value-added GDP from the BEA. The area graph was created in Omnigraphsketcher and the treemaps by R. Label were later added using Illustrator.
1 month ago
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From a very interesting database of Texas Government Employee Salaries run by The Texas Tribune, I created three data graphics for An Illustrated Guide of Income in the United States showing their distribution (pages 92–94).
I start with graphing the distribution of all public employee salaries below $250,000, 99.7% of all state employees, listing the most common job titles I found: teachers and professors, police officers, clerks and administrative assistants, bus operators, child protective services specialist and mental retardation assistants.
However, to graph the long tail of the income distribution I have to graph individual salaries. Many are heads of surgery departments and head coaches. The highest salary goes to the head football coach at the University of Texas at Austin. (Salary of $2.5 million plus a bouses of $2.7 million for a total of $5.2 million)
Another way to show how much inequality exists with these salaries is to plot the cumulative share of Texas public employees vs cumulative share of their salaries. But how does this compare to the Untied States as a whole? I found in a report from the CBO, a graph plotting the 2007 cumulative share of all US households against household income which I used as a stand in for everyone in the US.
Data sources: The Texas Tribune and the Congressional Budget Office.
Design notes: Graphs were created using OmniGraphSketcher, copied into Adobe Illustrator where annotations were added. The illustrator file was then placed into an InDesign document for the book. View all the graphics from the book online.
1 month ago
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