Sixteen portfolios, 1972 to 2025

What a slice of gold does, step by step

Starting from a 60/40 portfolio and adding gold in 2% steps, each step taken equally from equities and bonds, up to 45/25/30. Over this period more gold raised the average return and shrank the worst year throughout, while volatility fell to a low near 18% gold before rising again. Only the best year gave ground in the middle. Hover any point for that portfolio's mix and all four figures.

Average yearly return10%10%11%0%10%20%30%10.0%10.7%Volatility (annual)9%10%12%0%10%20%30%11.2%10.5%Lowest 9.8%Worst year-19%-15%-11%0%10%20%30%-18.0%-12.4%Best year24%37%50%0%10%20%30%+31.7%+46.5%Gold allocation, from 0% (a 60/40 portfolio) to 30% (a 45/25/30 portfolio), in 2% steps

Source: annual total returns for the S&P 500, ten-year US Treasury bonds and gold, Aswath Damodaran, NYU Stern, 1972 to 2025. Portfolios rebalanced each year. Average return is the arithmetic mean of annual returns; volatility is their standard deviation. This is one historical window, not a forecast, and the result depends on the period chosen.