Gold vs. Other Investments
The Comparison
Investments come in many shapes and sizes. Stocks, bonds, real estate, and even crypto all come to mind. Yet, when you compare gold vs. other investments, you might be shocked to see how it performs. By many metrics, gold has proven the most consistent value grower over the last 20 years.
To begin the comparison of gold vs. other investments, consider the S&P 500. Stock market index funds typically make up the bulk of investment strategies, and the S&P 500 is considered the standard.
Over the past 20 years, it has seen phenomenal growth, averaging around a 10-percent annual return over the period. Few investments have performed as reliably well. Yet, gold prices have substantially outperformed the S&P 500 over the past 20 years.
Exact comparisons depend on start and end dates, but in general, the S&P 500 increased by around 550 percent over the period, while gold grew by closer to 850 percent.
When looking at gold vs. stock market investments, gold is a clear winner.
Continuing the investigation of gold vs. other investments, real estate also makes up a substantial investment in many portfolios, and for good reason. It represents strong intrinsic value with opportunities to create cash flow, tax advantages, and other forms of wealth increases.
Yet, real estate can prove volatile, with the housing crash of 2008 serving as a prime example. Still, real estate has done well in the past 20 years. The median housing price increased by a factor of 167 percent. That’s strong growth, but it falls short of the eightfold increase in gold values.
Next up in gold vs. other investments is bonds. Bonds are often seen as the safest long-term investment. Designed specifically to grow above inflation with guaranteed returns, they often serve as a bolster against riskier investment elements in a portfolio.
Those guarantees come at a price, and bonds underperform most other common investment choices.
Exact bond yields vary with interest rates and bond type, but aggressive estimates cap at 100-percent growth over 20 years. Once again, gold performance dramatically outshines a staple in many accounts.
Finally, when comparing gold vs. other investments, we have to look at cash. Cash is often seen as the least valuable investment holding that still holds merit.
In many cases, interest on cash falls below the inflation rate, meaning sitting cash loses net value over time. Even assuming you could keep cash in a high-interest account for 20 years, the performance usually caps at around 25 percent for the period.
Cash holdings, at their best, perform worse than 1/30 of gold investments. This is not to suggest that all of your cash should be converted to gold; it further highlights the value of adding some gold to your portfolio to diversify your holdings and hedge against uncertainty.
Considering the comparison of gold vs. other investments, many people look for ways to fit it into their portfolio. You have many options, but we can split them into two categories: retirement accounts and non-retirement portfolios.
Regardless of your strategy, Citadel Gold can help you select and acquire gold and other precious metals to build a stronger portfolio that protects your wealth.
The IRS allows gold as an asset class in tax-advantaged retirement accounts. IRAs, 401ks, pensions, and other retirement accounts all have gold eligibility, but there are strict regulations to follow.
Not all gold assets qualify to be used in these retirement accounts. Only approved coins, bullion, or bars can go into a retirement account. Additionally, retirement gold must be stored at an IRS-approved facility.
If you keep gold at home, the IRS considers it a withdrawal, and you will receive taxes and penalties accordingly.
Knowing those rules, Citadel Gold can help you browse gold options for a retirement account and help you with purchase and delivery to the depository of your choice. We can also help you convert accounts to maximize tax advantages while enjoying the benefits of investing in gold.
Outside of retirement accounts, you have considerable freedom in how you may choose to invest in gold. You can purchase any coins, bars, or bullion that you like, and you can store them in a location of your choosing.
Citadel Gold experts can help you explore different gold assets to see what fits your investment strategy. We can also ensure delivery to your home or the location of your choice.
The gold you purchase will be under your direct control, giving you hard currency that hedges against uncertainty and diversifies your holdings.
See exactly how and why the comparison between gold vs. other investments favors precious metals. Gold has clear advantages, even over other precious metals, making it a strong investment option.
With that in mind, remember that Citadel Gold does not recommend investing all of your money and assets into gold. We recommend gold as part of a diversified investing strategy. Any single-asset portfolio experiences outsized risk compared to traditionally diversified investments.
The battle between gold vs. other investments has seen consistent growth throughout human history. In the modern era, gold floats above inflation. If fiat currencies inflate, the scarcity of gold maintains its value, giving rise to its per-ounce cost.
Gold demand has also grown steadily over time. Its use in precise electronics maintains that demand, accelerating its value well above inflation.
Investors also have more access to gold through modernized acquisition strategies. This incentivizes gold as an investment, leading to more gold owners buying and holding, further driving scarcity and prices.
As mentioned, gold hedges against inflation. This is why so many currencies worked on a gold standard for so long. When governments print money, they devalue the currency. Gold cannot be printed, thus it holds its intrinsic value, and it takes more dollars to purchase gold.
Other precious metals fill this role, too. Hedging against inflation remains one of the primary motivators for diversifying into precious metals. Even if currencies completely collapse, hard currencies maintain their value.
A reason gold does well vs. other investments is that it is valuable for its own sake, and something that virtually every society in human history has discovered. So why does it have intrinsic value?
There are many factors. Gold’s aesthetic quality has always added to its appeal. Its resistance to corrosion means it maintains its form over very long periods of time, adding to that intrinsic value.
It also has key properties that make it valuable in use cases. Being a great conductor and highly malleable makes it a great choice for precise electronics.
Most of all, gold has always been hard to find and acquire. The scarcity gives it trading value as no one can saturate the market and devalue gold.
This intrinsic value is why it makes a wonderful asset in a diversified account. Stocks can lose value based on business performance. Currencies can fail. Uncertainty abounds, but gold remains useful, pretty, hard to find, and reliable.
The other properties of gold contribute to its reliable growth and stability as an investment asset. It consistently outperforms most other stable investment options, and its intrinsic value guarantees that it will remain a good asset regardless of the uncertainties of the world.
Providing stability and growth potential in a single asset class creates efficient investments that bolster virtually any portfolio. That drives it as a leading choice for retirement accounts, showing why gold looks so promising vs. other investments.
Now that we’ve compared gold vs. other investments, the answer is clear. While there is no mandate to invest in gold, it’s popular for a reason. You can take a closer look at gold investment strategies to see if any feel right for you.
View some literature, or speak with one of our experts today. We’ll help you explore gold purchase options, what they mean, how to balance them in your portfolio, and how to take the most tax-advantaged strategy.
Your assets can include gold or other precious metals, and that inclusion can bolster your portfolio in ways unique to hard currency. It starts with knowledge, so learn more today.
