Investing in Gold: the Pros, the Cons and Whether to Even Invest at All

“Gold is generally seen as inflation hedge, but most investors forget that normally stocks are a better inflation hedge over medium to long-term horizons. However, there is one very rare benefit for investors. Gold is the ultimate safe haven. In times of extreme political uncertainty and international conflict, gold can protect against a wide range of rare and severe risks. Its value is not tied to any one country’s currency or economic performance. Gold’s history in this role speaks for itself. However, absent potential crises, gold risks significantly underperforming especially when held for the long-term. This is because gold doesn’t produce anything in real terms (just nominal value). Looking at long-term charts, gold is one of the worst performing assets. Even simple Treasury notes have performed better due to the interest they pay.”