No way gold outperforms stocks, long-term. You can get bursts of outperformance lasting a few years, and it may be useful as a portfolio component, but in terms of standalone returns… A macro theme for you to think about is whether the equity risk premium won’t be eroded to effectively zero, over the coming decade or so. The justification for a meaningful ERP is that stocks carry more risk, but in the era of QE and fully socialized risk, there’s IMO a strong argument to be made that diversified indices are in fact less risky than sovereign debt. The implication is that PE ratios on the SPX and similar indices may go to perhaps 50x-100x (as rates continue to fall) and stay there forever.
For gold, im actually raising the possibility that it will be significantly disrupted by technology. Similar to how horse riding (4000+ year long method of transporation) was disrupted by cars. If AI/Robotics will produce goods at an ever higher level of productivity, this should affect the output for ALL commodities including gold. Long-term, commodities have been a terrible investment, inflation adjusted, if productivity is about to increase (as the stock market seems to believe, along with many thinkers) then I think that should affect gold also, particularly as bitcoin will be preferred by anyone under the age of 35 and almost all newborns. so long-term, i think gold will fall into irrelancy. I still own it and plan to ride this trend but it feels more and more that its a doomed asset (in terms of returns or as a portfolio helper) regardless of its long-term tradition As far as ERP of stocks and bonds, I have no opnion of it but I will try to think more about this