Gold vs. Stocks: As Both Hit Record Highs, What's Performing Better for Investors? (2024)

FAQs

Gold vs. Stocks: As Both Hit Record Highs, What's Performing Better for Investors? ›

stocks: Which is the better investment? Stocks have generally performed better than gold over the years, but there can be exceptions. Looking back 20 years, for example, gold has outperformed the S&P 500.

However, gold is typically a poor investment option when the economy is strong. It will often lose money during these periods as investors sell gold to put their money in the stock market and other growth assets. In the long run, gold has a significantly lower average annual return than stocks.

Gold prices have continued to hit fresh highs in 2024 due to a wide range of factors — from escalating geopolitical risks and the interest rate outlook to budget deficit concerns, inflation hedging and central bank buying.

Gold is the best-performing primary asset class, delivering annualized returns of over 31% when real Treasury rates are negative.

Silver is more affordable than gold, making it an accessible way to diversify your investments. It's also widely used in industries, which means its value has the potential to grow based on market demand. Platinum's value comes from its rarity and industrial use, particularly in automotive manufacturing.

stocks: Which is the better investment? Stocks have generally performed better than gold over the years, but there can be exceptions. Looking back 20 years, for example, gold has outperformed the S&P 500.

Looking back 20 years, for example, gold has outperformed the S&P 500. However, the historical data doesn't mean that stocks are guaranteed to have higher returns going forward, as past performance is no indication of what's going to happen next.

In 2023, however, gold rebounded and again crossed the $2,000 mark in April and May, before sliding a bit to its current level of $1,924.95 as of September 11, 2023. Still, gold is up year-to-date, and there are reasons to think it could break $2,000 again, though there are no guarantees.

And like all gold investments, 1-ounce bars can serve as a hedge against inflation. That means buying in now, while inflation remains high, could deliver big benefits.

There are several risks to investing in gold, including as follows: Price volatility: The price of gold can be volatile, and it may fluctuate significantly over short periods. This can make it difficult to predict its value and can make it a risky investment.

Will gold be worth more in 10 years? ›

Gold is generally not prone to big price swings or high volatility, but it typically keeps growing alongside its utility. This means that forecasting future prices of gold for the next ten years is expected to indicate an increase in value, potentially resulting in profits for those making these predictions.

It turns out the average ultra-high net worth individual (UHNWI) with a net worth over $30 million does own a little gold. They just don't own giant vaults and swim in gold like Scrooge McDuck. The average UHNWI holds about 2% of their net worth in gold.

Individual investors can invest in gold in two ways: physical bullion or securities. Alternatives to buying gold include gold-backed stocks and funds. You should invest 5-10% of your portfolio in gold as a long-term hedge against inflation.

I'd stop investing in gold and silver completely. I don't put money in precious metals at all, because they have a lousy long-term track record. — Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover.

In general, silver has more potential uses than gold. Silver is used extensively in the manufacturing of electronics, solar panel cells and smartphones. When the economy is strong and growing, the demand for silver often grows.

Gold: Gold is often considered the go-to metal for investment. It's seen as a haven due to its ability to retain value during inflation. Gold is used in jewelry, electronics, and as a reserve currency.

Average annual return of gold and other assets worldwide 1971-2024. Between January 1971 and March 2024, gold had average annual returns of 7.98 percent, which was only slightly behind the return of commodities, with an annual average of eight percent. The annual average return of gold in 2023 was 13.1 percent.

What Are the Risks of Investing in Gold? There are several risks to investing in gold, including as follows: Price volatility: The price of gold can be volatile, and it may fluctuate significantly over short periods.

Cash, large-cap stocks and gold can be good investments during a recession. Stocks with sensitive prices and cryptocurrencies can be unstable during a recession.