Stocks vs Gold vs Oil – 2 Year Market Analysis

Is gold always a great investment or is the stock market the place to be?

With so many options now available for you to invest your money, it can be bewildering.  Where should you invest to get the most for your money?  Are stocks better that commodities?  Is oil better than gold?

This article aims to take a look at the performance of the major stock market indices and compare the performance over the past two years against precious metals and oil.  Why?  So you can compare the reality against where you are investing.

A Global View.

I regularly take a big picture view of market performance to enable me to see how the overall direction is developing, this helps assure me I am in the right markets (or wrong ones) and to enable me to assess the overall bullishness or bearishness of the market participants.

Global Profts - Where Best to Invest?  Stocks, Gold, Oil?
Global Profits – Where Best to Invest? Stocks, Gold, Oil? Click to Enlarge

The Return of the Stock Market

The last two years in in the stock market overall has been excellent..  The worst performer in the study was China’s HangSeng, returning 18% over the two years with 9% year on year (YOY).  But that is slim pickings compared to the leader of the pack the U.S. Tech Sector the NASDAQ 100, with a two year return of 50%, 25% YOY.

Although it had a poor 2014 the German DAX has roared back in 2015 to leave it as the second best performer with a 20% YOY or 40% two year return.  The U.S. S&P 500 managed 4% less than that.  Even the Indian SENSEX managed over 30%.

So, for Stocks the money keeps rolling in, volatility is on the whole low as is volume and journalists are referring to it as a Cinderella market.

Commodities – Gold – Silver – Oil

The last two years have been very unkind to those who thought Gold, Silver and Oil would be a good investment.

Fools Gold

The 2009 to 2012 Gold Rush saw every man and his dog selling their gold on the high street to pop up “We buy Gold” stores.  Selling was a wise move in 2012 which saw the topping of the Gold spot price.  I hope most of the general public made a good profit during this period, because Gold has plummeted over 40% since then.  Although, the conspiracy theorists who predicted the imminent collapse of the world economic structure and fuelled most of the bull market in gold have lost a good deal of their money in the last two years.

Silver Surfers Wipe Out

Silver has fared even worse.  Despite claims that silver supplies are running out and silver is more useful than gold in the manufacture of everything from iPad screens to deodorant,  Silver has seen a brutal 50% decline.  Silver is a beautiful thing to collect especially in the form of Silver Bullion Coins, and for the long, long, long term perhaps a good investment.  Analyzing both the gold and silver markets the speed of decline has slowed and looks to be bottoming out.  But if you are waiting for them to recover to 2012 levels you will have a long wait.  If you are new to these markets it is probably a good time to invest.

Oil – a slippery path

Oil is one of the most manipulated and protected markets on the globe, but no matter what OPEC tried to do, oil simply crashed in 2014, much to the jubilation of the man on the street who needs to drive to work every day.  While the 50% drop occurred in a very short time oil seems to have found a level where it is starting to rebound.  Cheap oil is however not good news for the environment as cheap oil means less dollars available for investment in green energy as the economics of green make less sense.  So, for the sake of the future of our planet a high oil price would be good, but hopefully green energy is now making unstoppable traction in the form of a handful of pioneering companies such as Tesla.

Summary

So the market keeps on moving up leaving the previous 2000 and 2009 highs far away in its wake.  Perhaps this is a Cinderella market, but we all know what happenned to Cinderella at midnight.  We do not have a bubble in the tech sector or in the market as a whole, but as markets continue to rise so will the interest rates to try to cool the market a little.  This is happenning in China now and the Federal Reserve is also dropping hints.  Invest now while you can before markets start to cool and consolidate into 2016 and 2017.

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