Are Stocks and Homes Really More Expensive? A Look at Price vs. Value (2000–2025)

At Keaney Financial Services Corp., we believe it's important to not only track the price of your investments but also to understand their real value over time. For example, an investor who put 100% of their money into the S&P 500 in 2000 has seen a significant expansion in the dollar value of that holding [1]. However, this analysis will examine that a large portion of this gain may be linked more to the debasement (loss of purchasing power) of the dollar. To substantiate this, consider that a "basket" of everyday goods and services that cost $100 in 2000 now costs approximately $192.70 today, meaning the dollar has lost nearly half its purchasing power [4]. This report will show how this loss of purchasing power compares to asset growth.

We can demonstrate this by changing the "measuring stick." Our analysis will show that, when priced in ounces of gold instead of dollars [2], the S&P 500's value has not kept pace; in fact, it has fallen during this specific period. This shows that it's easy to mistake a rising dollar price for a true increase in wealth. This report is designed to help you look at value through a different lens for informational purposes.

This analysis is designed to help differentiate between "nominal value" (the price on the tag) and "real value" (what that asset can actually buy). An investment's ability to grow faster than inflation is what determines its capacity to increase your long-term purchasing power [3].

Important Context: This analysis covers a specific period (Jan 2000 - Nov 2025). Different timeframes will yield different results. All investments, including gold and stocks, carry risk and can decline in value.

Understanding the Dollar's Value

Before we begin, it's helpful to clarify two different ways people measure the dollar's value, as they are often confused:

1. Against Other Currencies (Foreign Exchange): This is the value you most often hear about in the news (e.g., "the dollar is strong against the Euro"). This number, which changes daily, measures how many units of another currency (such as Euros or Japanese Yen) one dollar can purchase. A "strong dollar" in this context is beneficial for Americans traveling abroad or importing goods, but it can make U.S. exports more expensive for foreign buyers.

2. Against "Stuff" (Purchasing Power): This measures how many real goods and services (such as groceries, gasoline, or a car) one dollar can purchase domestically. When the prices of these items increase over time (a process known as inflation), the purchasing power of each individual dollar decreases [4]. This is a quiet, gradual erosion of value that directly impacts your standard of living.

This commentary focuses on the second concept: the long-term changes in the dollar's domestic purchasing power. To illustrate this, we will compare it to a tangible asset, gold, which has been used as a measure of value for millennia and is not tied to a specific government's monetary policy [3].

Here is a look at the changing value of money by comparing the U.S. Dollar to gold from January 2000 to late 2025:

• The Dollar's Buying Power: Since 2000, the U.S. dollar has lost approximately 48% of its purchasing power due to inflation. As a real-world example, a "basket" of everyday goods and services that cost $100 in 2000 now costs approximately $192.70 today (based on the CPI increase from 168.8 to 325.35). This means $1.00 now buys what $0.52 did in 2000 [4].

• Gold's Buying Power: Over the same period, gold's real purchasing power (its value after accounting for inflation) has increased by approximately 7.8 times, according to this data. For instance, in 2000, one ounce of gold could purchase about 2.8 of those $100 "baskets" of goods; today, that same ounce can purchase about 21.9 of the new, more expensive $192.70 baskets [2, 4].

• Gold vs. Major Assets: When priced in ounces of gold, major U.S. assets like stocks [1, 5, 6] and national home prices [7] have all become "cheaper" during this specific timeframe. As a clear example, in 2000, it took approximately 592 ounces of gold to buy the median-priced U.S. home. By 2025, it takes only about 97.5 ounces [2, 7].

  
  

Part 1: Gold vs. Everyday Goods (Purchasing Power)

In simple terms: This part is about your grocery bill. It shows that your $100 bill buys way fewer groceries than it did in 2000. But if you had an ounce of gold, it would buy way more groceries today than it did in 2000. Gold’s purchasing power for everyday goods has increased.

The U.S. dollar buys fewer of the same goods over time.

Example:

What Buys a Basket of Common Goods (e.g., Groceries)?

2000 vs. 2025 – Gold vs. U.S. Dollars

Common Goods                                                                   2000 Prices              Today’s Prices

Gold Needed to Buy the Basket

Result:

You need ~6.6× fewer ounces of gold today to buy the same goods.

You need ~2.3× more U.S. dollars.

Sources:

Purchasing power is a straightforward concept: how much "stuff" can your money purchase?

• The Dollar's Purchasing Power: Since 2000, the Consumer Price Index (CPI), a measure of a "basket" of common goods and services, has increased by approximately 92.7% (from 168.8 to 325.35) [4]. In plain terms, a basket of goods and services that cost $100 in 2000 would cost approximately $192.70 today. To illustrate how we determined the 48% loss, we can perform the math: a single dollar today buys far less of that basket than it did previously. The calculation is $1.00 divided by the new price of $1.927, which equals approximately $0.52. This means $1.00 from 2000 now buys only about $0.52 worth of those same goods. Its purchasing power has been cut by 48%.

• Gold's Performance: Gold tells a very different story during this same period. While prices for goods (CPI) nearly doubled, the price of gold increased from about $279/oz to $4,212/oz, a rise of over 14 times [2].

• The Result: Because gold's value grew far faster than the price of goods in this timeframe, its real-world purchasing power grew significantly. We can see this with a simple example:

  • In 2000, one ounce of gold (at $279) could buy about 2.8 of those $100 "baskets" of goods.

  • In 2025, that same ounce of gold (at $4,212) can buy about 21.9 of the new, more expensive $192.70 baskets ($4,212 ÷ $192.70 = 21.9).

• One ounce of gold today buys approximately 7.8 times more real goods and services than it did in 2000 (21.9 ÷ 2.8 = 7.8).

Purchasing Power Comparison (2000 vs. 2025)

Source: Calculations based on data from [4] and [2]. 2025 data as of Nov 2025.

Part 2: Gold vs. Major Investments (Assets)

In simple terms, this part compares gold to big-ticket items like stocks and houses. Although the dollar price of stocks and houses increased, the gold price decreased. 

Many investors will point out that their stocks and homes have also increased in dollar value, which is true. But what happens when we price those same assets in ounces of gold?

This is like changing the "measuring stick." It's an analytical tool that strips away the effects of the dollar's changing value, allowing you to see how assets performed relative to one another. The results offer a different perspective on long-term value.

U.S. Stocks (Dow Jones):

• In 2000, it took approximately 40.7 ounces of gold to "buy" the Dow (11,357.51 / $279.11).

• In 2025, it now takes only about 11.45 ounces of gold (48,254.82 / $4,212).

Observation: Priced in gold, the Dow is "cheaper" today than in 2000. This historical data shows that gold's purchasing power relative to the Dow increased by about 3.5 times over this specific period. This does not mean the Dow was a "bad" investment in dollar terms; rather, it means that the value of gold grew at a faster rate during this time.

Dow-to-Gold Ratio (Select Years)

Source: Based on data from [2] and [1]. 2025 data as of 11/13/2025.

U.S. Stocks (S&P 500):

• In 2000, it took about 5.2 ounces of gold to "buy" the S&P 500 (1,455.22 / $279.11).

• In 2025, it now takes only about 1.6 ounces (6,850.92 / $4,212).

Observation: A similar pattern emerges here. This data shows gold's purchasing power relative to the S&P 500 increased by about 3.2 times over this period. Again, this highlights the relative performance difference between these two assets over this timeframe.

S&P 500-to-Gold Ratio (2000 vs. 2025)

Source: Based on data from [2] and [5]. 2025 data as of 11/13/2025.

Tech Stocks (Nasdaq 100):

• In 2000, at the dot-com peak, it took nearly 13.6 ounces of gold to "buy" the Nasdaq 100 (3,790.55 / $279.11).

• In 2025, it now takes only about 6.1 ounces (25,517.33 / $4,212).

Observation: The trend continues with tech stocks, though less pronounced. This data shows gold's purchasing power relative to the Nasdaq 100 increased by about 2.2 times over this period since its 2000 peak. The starting point at the peak of the 2000 tech bubble makes this comparison particularly noteworthy.

Nasdaq 100-to-Gold Ratio (2000 vs. 2025)

Source: Based on data from [2] and [6]. 2025 data as of 11/13/2025.

U.S. Housing:

• The story is similar for real estate. Let's use a real-world example: the median sales price of a home in the U.S.

  • In 2000, the median home price was about $165,300 [7]. At a gold price of ~$279.11/oz, it took approximately 592 ounces of gold to buy a median-priced home. [2]

  • In 2025, the median home price rose to approximately $410,800 (as of Q2 2025) [7]. At a gold price of ~$4,212/oz, it now takes only approximately 97.5 ounces of gold to buy that same median-priced home.[2]

Observation: The contrast is also evident in the real estate sector. This data shows that while the dollar price of a median home has risen by about 148%, its price in gold has fallen by over 83%. This indicates that, while housing has been a significant source of wealth for many, its price appreciation has also been outpaced by gold's performance over this timeframe.

Part 3: Why This Matters for Your Portfolio

In simple terms: This is the "so what?" part. The main takeaway is not about us "buying gold" or "selling stocks." It's to understand that just because your account has more dollars in it, it doesn't mean you are richer. You are only richer if your money is growing faster than your cost of living. This is why our investment approach is guided by our proprietary KFSC Macro-Regime Framework, a structured and multi-layered system designed to evaluate and respond to a wide range of macroeconomic conditions. This data-driven process, culminating in the KFSC Core Macro Regime Model and our KFSC Gold & Currency Debasement, helps guide the allocation of our KFSC Risk-Managed Strategies. The entire process is grounded in economic research, supported by historical validation, and informed by a consistent risk management philosophy.

Our analysis isn't about predicting short-term prices for any asset. It's about understanding long-term trends, structural and cyclical changes, and the importance of measuring real, inflation-adjusted returns. Asset prices can move in long cycles, and this 25-year window represents one such period.

While the dollar price of stocks and homes has risen, this analysis suggests that a portion of that "gain" may be a reflection of the dollar itself losing purchasing power. This is a critical concept: separating "nominal gains" (simply having more dollars) from "real gains" (having more purchasing power). An investment that doubles in dollar value over a period where the dollar loses half its purchasing power has only kept you even; it has not created new wealth.

When measured against a different unit of account, such as gold, we get a clearer picture of real value. This type of analysis helps us challenge assumptions and evaluate performance on an inflation-adjusted and relative basis. It highlights the importance of owning a diversified mix of assets that behave differently in various economic environments.

It is important to remember that this analysis is historical and focuses on a specific timeframe that was highly favorable to gold. Asset classes can perform differently over other periods. For example, there have been long stretches, such as the 1980s and 1990s, where stocks (as measured by the S&P 500) significantly outperformed gold [5, 2]. This historical contrast is precisely why diversification, rather than relying on any single asset class, remains a cornerstone of prudent portfolio management.

We believe in analyzing your portfolio's ability to preserve its purchasing power over the long run, through all economic seasons. Our goal is to try to build portfolios that are resilient and positioned not just to grow in nominal dollar terms, but to grow your real wealth.

Investment Risk Disclosures

This commentary is for informational purposes only and is based on an analysis of historical market data. It contains forward-looking statements based on current market conditions that are not guarantees of future performance. The commodities markets are complex and subject to rapid changes. Investing in commodities, including gold, involves a high degree of risk and is not suitable for all investors. The price of gold is volatile. Past performance is not indicative of future results. Investors should carefully consider their investment objectives and risk tolerance before making any investment decisions, and may lose a substantial portion or all of their investment. This material should not be considered a recommendation to buy or sell any security.

Important Disclosures

This commentary is for informational purposes only and should not be considered a recommendation to buy or sell any security or the provision of specific investment advice.

The opinions and forecasts expressed are those of Keaney Financial Services Corp. as of the date of this commentary, are subject to change at any time based on market and other conditions, and may or may not come to pass.

The KFSC Macro Regime Model is a proprietary tool, and its analysis is based on historical data; it does not guarantee future results. Past performance is not indicative of future results.

The rapid fluctuations in commodities will lead to significant volatility in an investor's holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.

All investing involves risk, including the possible loss of principal. Please consult with your financial advisor to determine if the strategies discussed are suitable for your personal financial situation. Consult your qualified financial, legal, or tax advisor before making investment decisions.

References and Important Disclosures

References

1. S&P Dow Jones Indices. (2025a). Dow Jones Industrial Average (DJIA). Federal Reserve Bank of St. Louis. Retrieved November 13, 2025, from https://fred.stlouisfed.org/series/DJIA

2. World Gold Council. (2025). https://www.gold.org/goldhub/data/gold-prices

3. World Gold Council. (2025). Why invest in gold? Retrieved November 13, 2025, from https://www.gold.org/why-gold

4. U.S. Bureau of Labor Statistics. (2025). Consumer Price Index for All Urban Consumers (CPIAUCSL). Federal Reserve Bank of St. Louis. Retrieved November 13, 2025, from https://fred.stlouisfed.org/series/CPIAUCSL (Data used: Jan 2000 index 168.8; Oct 2025 index 325.35)

5. S&P Dow Jones Indices. (2025b). S&P 500 (SP500). Federal Reserve Bank of St. Louis. Retrieved November 13, 2025, from https://fred.stlouisfed.org/series/SP500

6. Nasdaq. (2025). Nasdaq 100 Index (NASDAQ100). Federal Reserve Bank of St. Louis. Retrieved November 13, 2025, from https://fred.stlouisfed.org/series/NASDAQ100

7. Federal Reserve Bank of St. Louis. (2025). Median Sales Price of Houses Sold for the United States (MSPUS). Retrieved November 13, 2025, from https://fred.stlouisfed.org/series/MSPUS (Data used: Q1 2000 $165,300; Q2 2025 $410,800)

Important Disclosures

All data, from January 1, 2000, to November 13, 2025, is used for illustrative purposes only. The 2025 data points are based on information available as of November 13, 2025. This information is not a recommendation, solicitation, or investment advice.