These are troubled times and gold has always been the ultimate hedge against economic volatility and crisis.”

Gold has stood the test of time as a reliable store of wealth, especially in unstable times.”

The above quotes are from two gold dealers, though there are many more quotes just like them. If you do a little research, you will notice that all these commercials are trying to scare you. Why would the dealer try to incite fear? Simple: they know they can manipulate your emotions to earn a big profit for themselves.

Think about it this way. The commercial tells you the economy could crash and the dollar will be worthless. The spokesman says gold is a great investmentĀ  that will hold its value. He waxes on about how bright the future looks for precious metals. Then, he offers to trade you this wonderful investment for your dollars. What’s wrong with that picture?

In fact, I recently called one company to ask this exact question. The representative jovially laughed, saying it was a great question. He then told me that the company needs dollars mainly to pay employees and run its business. He claimed that they still hold a sizable amount of gold and silver. If you think about this for any length of time, it makes no sense. There would no business expenses to pay for at all if his company wasn’t in the business of trading their gold for your dollars.

The representative also told me that over 40 year, 30 year, 20 year and 10 year periods, gold has outperformed stocks. Well, the data disagrees. Take a look at the returns below to see what a $1 investment would have turned into during different time periods.

Gold Returns Compared to Stock Returns (Investment of $1)


January 2005-January 2015

Gold Return: $2.31

Stock Return: $2.09


January 1995-January 2015

Gold Return: $2.03

Stock Return: $6.56

January 1985-January 2015

Gold Return: $1.79

Stock Return: $25.51

January 1975-January 2015

Gold Return: $1.52

Stock Return: $101.54

January 1965-January 2015

Gold Return: $4.54

Stock Return: $113.41

January 1802-December 2012

Gold Return: $4.52

Stock Return: $704,997*

In summary, the history shows that stocks are a far better investment than gold. Remember: gold is a commodity, not an investment. And, as always, contact us with any questions.


*Data from Buy, Hold & Sell. Accessed 2015. Link to Source