Investor Note · 14 April 2026
The $1.16M Answer to
“What Beats Inflation?”
Invesense Research · 98 years · 6 asset classes
The Long-Run Verdict — 3-Part Series
Part 1
The Century-Long Verdict
98 years. 6 asset classes. One clear winner. The chart that just crossed $1M — and settles the debate.
Part 2
Decades, Crises & the Lost Decade
What happened decade by decade — and why the 2000s are the strongest argument against equities that still fails.
✓ PublishedPart 3
Building the Resilient Portfolio
Allocation frameworks for all regimes — 60/40 vs. 50/20/15/15 and the Shariah-compliant construct.
In 1928, $100 invested in U.S. equities — dividends reinvested — grew to $1,157,599 by end of 2025. The same $100 in gold reached $21,025 — a number that includes gold’s historic +66% surge in 2025. In 3-month T-bills, $2,578 — barely clearing the inflation baseline of $1,895. Across 98 years and six asset classes, the asset allocation decision is not a matter of style preference. It is the single most consequential financial decision any investor makes.
01
The Century-Long Verdict.
The chart below uses a logarithmic scale because no linear scale can contain 98 years of compounding without collapsing five of the six series into a flat line near the bottom. Equities stand apart: $1,157,599, compounding at +10.0% annually since 1928 — the first time in this dataset that equities have crossed the seven-figure mark from a $100 base. Baa-rated corporate bonds — an asset class most investors underweight — reached $53,952 at +6.6% per year, demonstrating that credit risk, held patiently, is rewarded. The 10-year Treasury reached $7,753. Gold: $21,025 (including its +66% calendar year 2025 return, confirmed by LBMA PM Fix data). Private real estate (NCREIF): $5,626. T-bills: $2,578. The purchasing-power-neutral baseline — the dollar’s inflation-adjusted floor — is $1,895. T-bills are barely above it.
The gold line is worth examining closely. From 1928 to 1971 — 43 years — gold was legally fixed. First at $20.67/oz under the Gold Standard, then at $35/oz under Bretton Woods. That flat line on the chart is not a data anomaly. It is policy. The metal was not permitted to reprice. The free-market gold story begins in 1971, when Nixon closed the gold window. We cover that story — including the 2025 surge — in full in Part 3.
02
After Inflation: What the Numbers Actually Mean.
Nominal returns tell half the story. Every dollar earned must first survive inflation before it creates real wealth. Across the full 98-year period, U.S. CPI compounded at 3.0% annually — turning $100 into $1,895 in pure purchasing-power terms. Any asset that failed to beat that is a wealth destroyer in real terms, regardless of its nominal gain.
The table below converts every asset’s nominal CAGR into a real return — the annual advantage earned above and beyond inflation. Even after gold’s exceptional +66% year in 2025, the equity premium is not a rounding error. Stocks compound at +6.8% real per year. Gold at +2.5%. T-bills at a near-zero +0.3%. The 4.3 percentage-point annual real advantage of equities over gold, compounded over 98 years, is the mechanism that produces a 55× wealth gap — and that gap existed even after gold’s best year in five decades. Asset class selection, held consistently, not market timing, not leverage, not strategy. Mehra & Prescott (1985) documented this premium as structurally too large to be explained by conventional risk theory. Dimson, Marsh & Staunton (2002) confirmed it holds across 22 countries over 101 years. The data is not a U.S. anomaly.
| Asset Class | $100 → End-2025 | Nominal CAGR | Real CAGR* | Beat Inflation? |
|---|---|---|---|---|
| Stocks (S&P 500) | $1,157,599 | 10.0% | +6.8% | ✓ |
| Corp. Bonds (Baa) | $53,952 | 6.6% | +3.5% | ✓ |
| Gold | $21,025 | 5.6% | +2.5% | ✓ |
| 10Y T-Bonds | $7,753 | 4.5% | +1.4% | ✓ |
| Real Estate (NCREIF) | $5,626 | 4.2% | +1.1% | ✓ |
| T-Bills (3M) | $2,578 | 3.4% | +0.3% | ≈ |
| Inflation (CPI) | $1,895 | 3.0% | — | baseline |
* Real CAGR = (1 + nominal CAGR) / (1 + CPI CAGR) − 1. Data: Damodaran, NYU Stern (2026); 2025 gold & equity returns cross-verified vs. Bloomberg Terminal (GOLDLNPM, SPTR). CPI: U.S. Bureau of Labor Statistics via Bloomberg. Total return basis. 1928–2025. Past performance is not indicative of future results.
Our View
The 98-year record resolves one question cleanly: only equities compound at a rate that meaningfully separates you from inflation. A +6.8% real annual return is not a statistic — it is the mechanism that turns $100 into $1,157,599 while inflation turns that same $100 into $1,895. Gold’s historic 2025 run narrowed the wealth gap from 78× to 55×. It remains 55×. Gold, real estate, and bonds all beat inflation. None of them beat it by enough to generate generational wealth on their own.
The portfolio implication: the question is not whether to hold equities — 98 years of data settles that. The question is how much volatility you can absorb during the decades when equities underperform. That is the subject of Part 2.
Up next in the series
The data gets harder before it gets clearer.
The century-long picture strongly favors equities. But there were decades — most memorably 2000 to 2009 — where stocks delivered (1.0%) annually for ten years while gold returned +14.1%. Was that a fluke, or a signal? Part 2 breaks down every decade since 1929, maps the geopolitical and macro events that drove each one, and addresses the Lost Decade head-on.
Part 2
Decades, Crises & the Lost Decade
Why entry valuation matters more than which decade you’re born in — and what the 2000s were actually pricing in from day one.
✓ PublishedPart 3
Building the Resilient Portfolio
Allocation frameworks for all regimes — 60/40 vs. 50/20/15/15 and the Shariah-compliant construct.
Speak with our investment team
For a deeper discussion on how these themes apply to your portfolio, we welcome a conversation.
Invesense Asset Management Ltd. is regulated by the Dubai Financial Services Authority (DFSA). This material is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Past performance is not indicative of future results. Data: Damodaran, NYU Stern (2026); S&P Dow Jones Indices; U.S. Department of the Treasury; NCREIF; LBMA; U.S. Bureau of Labor Statistics; Bloomberg Terminal.
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