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Producers of gold/commodities are included, as these are businesses financed with debt/equity.The return on buying gold bars and sticking them in your basement
by mrfredward 7y ago
Producers of gold/commodities are included, as these are businesses financed with debt/equity.The return on buying gold bars and sticking them in your basement (or buying a note tied to the value of gold in someone vault) isn't covered because it doesn't produce income in the way that stocks, bonds, and rental properties do.
- rpz 7y agoIn what way does the income on an investment on precious metals or commodities differ from the income on a paper asset? An interesting difference that I do know with respect to gold is that selling physical gold is not subject to any taxation
- mrfredward 7y agoCompanies return capital to shareholders, bonds pay interest, and when you rent out real estate, tenants send you a check every month. No one sends you a check in the mail for having a gold bar in your basement. There is no income, but you can benefit from a change in price when you sell it.
- xiphias2 7y agoI thought the article is about capital returns (income+change of price), that's the only interesting way to compare assets.