Investment Returns? Just Inflation Stupid
Channel: Marc De Mesel
Date: 2016-04-28

I used to have a blog publishing at lot of historical investment returns for gold, stocks, bonds, cash, as well as the permanent portfolio which was a mix of these assets. I did this for the Eurozone, USA, Japan, UK and Iceland starting in 1972. Average returns were around 7% for these assets and the permanent portfolio which looked good, however once I realized that real inflation for most fiat currencies like the EUR and USD was around 5% instead of the published 2%, I had to admit to myself I wasn't making any money by diversifying broadly over different assets. 

Using USD or EUR as a token of measurement of profit lead to many investors fooling themselves, unless you deduct -5% per year to count for loss to purchasing power of the currency. In the meantime competing currencies like Bitcoin started out, that cannot be inflated out of thin air, and go up in value instead of down overtime. I decided to start focusing on cryptocurrencies and later angel investments. Taking higher risks by investing more in better risk/reward ratio investments, have much more volatility in my portfolio but making real money if things work out.