{"id":10033,"date":"2025-03-06T19:44:57","date_gmt":"2025-03-06T19:44:57","guid":{"rendered":"https:\/\/zacksim.com\/financial-professionals-insights\/?p=10033"},"modified":"2025-05-12T14:46:03","modified_gmt":"2025-05-12T14:46:03","slug":"is-gold-a-good-long-term-investment","status":"publish","type":"post","link":"https:\/\/zacksim.com\/financial-professionals-insights\/is-gold-a-good-long-term-investment\/","title":{"rendered":"Is Gold A Good Long-Term Investment?"},"content":{"rendered":"\n<p><em>Jeffrey G. from Conyers, GA asks: <\/em>Hello Mitch, I\u2019ve noticed that gold has been on a tear recently. I\u2019m curious if you have an explanation as to why, and I wonder if you think it makes sense to have a gold allocation in an investment portfolio for diversification, as a hedge, or maybe even for just pure return reasons. Thank you.<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for writing, Jeffrey. Gold has been in rally mode recently, rising in-line with the S&amp;P 500 last year and moving higher year-to-date in 2025. The 25% gain last year was gold\u2019s best annual performance in over a decade. While this seems impressive, consider that the S&amp;P 500 rose over 25% in 2019, 2021, and 2023. More on that later.<sup>1<\/sup><\/p>\n\n\n\n<p>First, let me address your question on the \u2018why\u2019 of strong gold performance. The reasons are likely multifaceted, rooted in a combination of economic, geopolitical, and market-driven factors. I think it\u2019s fair to point to geopolitical and global economic uncertainty as demand drivers for gold, with two ongoing conflicts, swirling questions about global alliances, and lingering uncertainties about trade and tariff policy.&nbsp;<\/p>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_03_06_2025&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_03_06_2025&amp;content=dos_and_donts\">Markets Are Always Moving\u2014Are You Making the Right Investing Moves?<\/a><\/u><\/strong><\/p>\n\n\n\n<p>Gold\u2019s surge is just the latest market shake-up. Smart investors don\u2019t just watch trends\u2014they know how to act on them.<\/p>\n\n\n\n<p>Our guide,&nbsp;<em><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_03_06_2025&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_03_06_2025&amp;content=dos_and_donts\">\u2018<strong><u>The Do\u2019s and Don\u2019ts of Stock Market Volatility\u2019<\/u><\/strong><\/a><\/em>&nbsp;is essential for protecting your investments. Backed by 30 years of experience, we reveal critical recommendations for investors, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Three best practices to successfully manage periods of market volatility<\/li>\n\n\n\n<li>Three most common mistakes investors make, and why they are so damaging to your long-term investing goals<\/li>\n\n\n\n<li>Historical data that supports our conclusions and underscores the recommendations we propose<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide today!<\/p>\n\n\n\n<p><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=email&amp;term=bimonthly_dos_and_donts_zim_11_26_2022&amp;content=dos_and_donts\"><strong><span style=\"text-decoration: underline;\">Download<\/span><\/strong><\/a><strong><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_03_06_2025&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_03_06_2025&amp;content=dos_and_donts\"><span style=\"text-decoration: underline;\"> Your Copy Today:\u00a0<em>The Do\u2019s and Don\u2019ts of Stock Market Volatility<\/em>\u00a0<sup>2<\/sup><\/span><\/a><\/strong><\/p>\n\n\n\n<p>We\u2019ve also seen central banks around the world aggressively increasing their gold reserves, purchasing over 1,000 tonnes (metric units) annually for the third consecutive year. This large-scale institutional buying has played a key role in supporting higher prices.<\/p>\n\n\n\n<p>That all being said,&nbsp; I\u2019m less enthusiastic about gold as long-term investment. Historically, gold has underperformed equities over extended periods\u2014there have been periods of strong appreciation, often followed by prolonged stagnation or sharp declines. There are no reliable fundamentals to support gold\u2019s long-term appreciation, like earnings and free cash flow do for equities. It follows that gold does not generate income, unlike stocks, which provide dividends. This lack of income generation limits gold\u2019s ability to contribute to long-term wealth accumulation, in my view, making it less attractive than equities or fixed income for investors who prioritize long-term growth and passive income.<\/p>\n\n\n\n<p>At the end of the day, while gold\u2019s recent rally has been impressive, its long-term track record suggests that it is not the best option for sustained wealth building. Its volatility, lower historical returns, and lack of income make it an unreliable long-term asset compared to stocks, in my view. I am not outright against gold as an allocation within a portfolio, but I would caution against seeing it as a long-term growth asset and certainly not as an income generator.<\/p>\n\n\n\n<p>To build lasting wealth, it\u2019s essential to focus on long-term strategies, not short-term trends. That\u2019s why we\u2019re offering our guide, <strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_03_06_2025&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_03_06_2025&amp;content=dos_and_donts\">The Do\u2019s and Don\u2019ts of Stock Market Volatility<sup>3<\/sup><\/a><\/u><\/em><\/strong>, which provides proven strategies to help you manage market uncertainty and stay on track for your financial goals.<\/p>\n\n\n\n<p>Inside, you\u2019ll discover:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Three best practices to successfully manage periods of market volatility<\/li>\n\n\n\n<li>Three most common mistakes investors make, and why they are so damaging to your long-term investing goals<\/li>\n\n\n\n<li>Historical data that supports our conclusions and underscores the recommendations we propose<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, download your free guide today!<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gold has been rallying in recent months. Mitch answers a reader&#8217;s questions about the role of this precious metal in a portfolio. <\/p>\n","protected":false},"author":4,"featured_media":9885,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-10033","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitch-on-the-markets"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/financial-professionals-insights\/wp-json\/wp\/v2\/posts\/10033","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/financial-professionals-insights\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/financial-professionals-insights\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/financial-professionals-insights\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/financial-professionals-insights\/wp-json\/wp\/v2\/comments?post=10033"}],"version-history":[{"count":3,"href":"https:\/\/zacksim.com\/financial-professionals-insights\/wp-json\/wp\/v2\/posts\/10033\/revisions"}],"predecessor-version":[{"id":10036,"href":"https:\/\/zacksim.com\/financial-professionals-insights\/wp-json\/wp\/v2\/posts\/10033\/revisions\/10036"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/financial-professionals-insights\/wp-json\/wp\/v2\/media\/9885"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/financial-professionals-insights\/wp-json\/wp\/v2\/media?parent=10033"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/financial-professionals-insights\/wp-json\/wp\/v2\/categories?post=10033"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/financial-professionals-insights\/wp-json\/wp\/v2\/tags?post=10033"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}