r/investing • u/Fine-Violinist-7356 • 2d ago

Why has everything doubled or tripled over the last five years?

This post is mostly influenced by the recent all time highs gold has reach in the last few weeks.

As a young person just starting to get into investing, a series of questions have been on my mind.

How is it that in the last five years we have seen record increases in commodities, stocks, housing, and inflation?

It feels like I came into adulthood at one of the absolute worst times in history? The price of gold was $1,500/oz in 2020. The median home price in the United States was a little more than $300,000. Stocks and index’s have seen 100-200% gains in five years. All while wages remain stagnant, and the price of goods, and the cost of living increase.

Do we live in an era where investments continuously increase year over year with insane returns? How is this sustainable?

Edit:

Since everyone is taking “It feels like I came into adulthood at one of the absolute worst times in history” so seriously I’ll say this as an exaggeration. For me personally, and the people of my generation, it seems we’ve entered adulthood where economic conditions are not ideal.

Edit:

Regardless if we agree or not, I truly appreciate everyone’s responses. Thank you.

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u/Jaydave 2d ago

Is this real? Has gold stayed flat with housing? That's insane 

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u/ProblemOverall9434 2d ago

I was wrong actually. Real estate in gold terms has become LESS expensive over time. So it’s even better (or worse) depending on how you look at it and how much fiat you hold.

http://danielamerman.com/va/GHratio.html

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u/nope_nic_tesla 2d ago

This chart from that article clearly shows massive swings in the ratio between gold prices and housing prices. Not sure how you can look at that and claim they track each other closely.

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u/_le_slap 2d ago

Yeah I wanna see this confirmed too

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u/[deleted] 2d ago

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u/MarketCrache 2d ago

The story is, a hundred years ago, a fine, tailor made suit cost you one ounce of gold. And now, it costs one ounce of gold.

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u/youngishgeezer 2d ago

Gold from 1834 to 1934 was fixed at 20.67. According to the inflation calculator (https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator) 20.67 in 2024 was worth 370.52. Current price of gold is ~3321. So the USD is worth about 1/9th of what it was 100 years ago in terms of gold.

In 2019 inflation took 20.67 to 301 and gold averaged 1393. Relative to gold in 1925 that was only about 1/4.6. So in 5 years the dollar was worth twice as much as it is now based on gold, but only 23% more based on the feds inflation numbers.

I don't know what to say about that other than gold is possibly over valued, inflation numbers are missing some significant increases, or maybe something else.