How Does Gold Stack Up as an Investment Option?

For long-term investors, we think there are likely better options available than gold. Gold as an asset class has seen historically both boom and bust periods, which often require excellent timing in order for investors to benefit. Gold prices can remain stagnant for long periods of time, even decades. And so again, as an investor in precious metals, including gold, your success is often highly reliant on getting the timing just right, which is difficult to do. 

I think it's important for investors to remember that the supply of gold is largely fixed, with mining only adding marginal incremental metal to global supply each year. Therefore, changes in gold prices are often driven by demand or sentiment, which is difficult to time. Gold's long-term performance has been lackluster, as you see on this chart, where other asset classes, such as equities' returns, have far outpaced that of gold. Gold has been a more volatile asset class, experiencing boom and bust periods along the way to subpar returns. 

For long-term investors, considering the risks of investing in gold, we find that there are often more suitable assets or better asset classes to most reasonably likely help you achieve your long-term goals and objectives.