Is Gold a Good Investment? Pros & Cons Explained

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🌟 Is Gold a Good Investment? 🏦💰 | Exploring Historic Returns and Risks 💼📈
Around 2600 years ago, in 600 BC, people first started using gold as currency. Today, central banks worldwide own over 35,000 tonnes of gold, almost one-fifth of all the gold ever dug up. But is gold actually a good investment? Should you put your money into gold? In this video, we'll explore these questions, comparing gold to the stock market and hearing from investing legend John C. Bogle.
🔍 Understanding Gold's Role: Store of Value 🏆
Gold, a non-income producing asset, doesn't generate cash like stocks or bonds. It's valued based on demand driven by its perceived worth and security. Nearly 50% is used in jewelry, 40% for investments, and 10% for industry.
📊 Gold's Returns and Risks Over Time 📉
Examining gold's performance over 5, 10, 20, 30, and 50 years reveals its ability to preserve wealth against inflation. However, gold's price stability varies, sometimes lagging behind inflation. Compared to stocks, gold exhibits higher price volatility, impacting investment outcomes.
📈 Gold vs. S&P500: Performance Comparison 📉
Over long periods, the S&P500 consistently outperforms gold by 3 to 6%, with lower volatility. Despite this, gold serves as a hedge against financial system instability, offering protection from currency devaluation and geopolitical risks.
💼 Diversification and Portfolio Allocation 📊
While gold can safeguard against capital loss, excessive allocation can hinder returns and increase risk. Experts recommend holding 1% to 5% of your portfolio in gold, tailored to your risk tolerance and investment goals.

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