Granted, this excludes dividends. But adding them in still gives gold an impressive record. Since 1971, the All-Share index has given us a total return of 12.1 per cent a year against gold's 9.9 per cent return to a sterling-based investor.
Gold's admirers say this shows how attractive the metal is during times of volatile exchange rates and inflation; since 1971, UK consumer prices have risen 1,200 per cent, meaning that £1 in 1971 is worth only 8p today.
But there's a different way of thinking about gold, which should perplex equity investors. Investing in gold is like putting your money under a mattress, whereas investing in equities should, in theory, finance real economic activity. The fact that equities have barely outperformed gold therefore, says Gueorgui Kolev of EDHEC Business School in Lille, shows that the returns to investing in real economic activity and in innovation have been paltry. In this sense, the returns to economic growth - and real GDP is 2.6 times what it was in 1971 - have accrued not so much to capital as to labour (and in recent years managers).
Sure, many equities have done well during this time. But for every GlaxoSmithKline or Microsoft there has been a GEC or Polly Peck. The low equity premium over gold tells us that investing in the real economy hasn't paid very well.
This, though, is only a relatively recent development. Robert Barro of Harvard University and Sanjay Misra of economic consultant The Greatest Good estimate that, before 1971, gold made only around 1 per cent a year. Equities, by contrast did very well; the UK market gave a total return of 6.1 per cent a year in the 100 years to 1971.
So, what changed after 1971? Consider three facts:
■ The anomaly here isn't equities - whose returns have been consistent before and since 1971 - but gold, which has done much better since 1971.
■ Gold's post-1971 returns haven't been steady. They've almost all come since 2002.
■ Professors Barro and Kolev agree that, according to economic theory, gold should give low returns. This is because it is uncorrelated with obvious economic risks such as recession or stock market falls and so is useful as portfolio insurance. But insurance policies shouldn't have high expected returns.
These three facts are consistent with the possibility that gold has been in a super-bubble. Either it has enjoyed a one-off rise or - more worryingly - its recent fall is the start of a long deflation of the bubble.
This is only a possibility. But if it is wrong, it leaves us with a real puzzle for equity investors: why should the returns to investing in risky real economic activity be so poor?
