Tier 2 Index Investing

Bear Case

• [FALSE] Gold has outperformed the S&P 500 over the trailing 30-year period.

  I just saw today that gold now has outperformed the S&P for the last 30 years

  • Correction: Over the trailing 30-year period (approximately 1995-2025), the S&P 500 total return has significantly OUTPERFORMED gold, with approximately 2-3x the cumulative gain. Gold has NOT outperformed the S&P 500 over this period.

Bull Case

• [MISLEADING] The S&P 500 has been the top-performing investment asset class since 1920 over a century-long period.

  the number one investment asset class okay since 1920 has been the S&P 500

  • Correction: The S&P 500 (total return) has been one of the best-performing large-cap equity indices since 1926, averaging ~10% annualized nominal returns. However, small-cap value stocks have historically outperformed it, and its performance is highly time-period dependent. It was not the top performer over 2000-2010. The ‘since 1920’ framing is also imprecise since the index was created in 1957.