Investors who owned stocks in the 2010s generally experienced some big gains. In fact, the SPDR S&P 500's SPY total return for the decade was 250.5%. But there’s no question some popular investments did much better than others along the way.
Gold Miners’ Difficult Decade: One lagging performer in the last decade was the VanEck Vectors Gold Miners ETF GDX.
The GDX ETF started out the 2010s trading at around $47.70. For the first year and a half of the decade, gold prices were on fire, rallying from around $1,100 per ounce to as high as $1,923/oz in mid-2011.
Investors were scooping up gold on concerns that the massive stimulus action taken by the Federal Reserve during the financial crisis in 2008 and 2009 would eventually lead to significant inflation. Unfortunately for gold investors, that inflation never materialized and the $1,923 level represented peak gold prices of the 2010s.
Given the GDX trades largely in-line with gold spot prices, the fund peaked in mid-2011 at $66.98, its decade high. Sluggish inflation numbers, 0% interest rates and steady economic growth over the next several years made gold an afterthought for many investors. The GDX fund drifted steadily lower over the next four years, eventually bottoming out at $12.40 in early 2016.
Gold prices spiked in early 2016 to new two-year highs, and the GDX fund followed suit, peaking at $31.79 in mid-2016. The breakout coincided with concerns over the impact of a surprising Brexit vote in Europe.
GDX In 2020 And Beyond: After initially dropping to $16.18 during the market sell-off in March, the 2020 outbreak of COVID-19 and subsequent stimulus efforts once again have the GDX trading higher. The fund recently hit $45, its highest level since 2013.
Despite the recent rally, the GDX fund hasn’t been a particularly great overall investment in the past decade. In fact, $1,000 GDX shares in 2010 would be worth about $861.10 today, assuming reinvested dividends.
The good news for GDX investors is that if the fund continues to follow its 2008 financial crisis pattern, it will not peak for more than two years after the stock market bottom in March of 2020.
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