Gold is one of the few assets that humans have agreed holds value for over 5,000 years. Not stocks. Not bonds. Not real estate. Gold.
But here’s the key question:
Does that history automatically make it a good investment today?
Let’s walk through it clearly.
A Quick History of Gold
Ancient Civilizations
The Egyptians, Romans, and Greeks used gold for currency, jewelry, and storing wealth. It was portable, scarce, durable, and didn’t corrode. That combination made it ideal as money.
Gold Standard Era
For much of modern history, currencies were backed by gold. In the United States, the dollar was convertible into gold until 1971, when President Richard Nixon ended the gold standard. After that, the U.S. dollar became fiat currency, backed by government trust rather than physical metal.
Why This Matters
For thousands of years, gold functioned as money. Today, it functions more as a store of value and hedge.
That’s a very different role.
What Gold Actually Is as an Investment
Gold does not:
• Produce income
• Pay dividends
• Generate rent
• Create earnings
It simply sits there.
Its return depends entirely on what someone else is willing to pay for it later.
That’s not automatically bad, but it’s important to understand.
Compare that to stocks, which represent ownership in companies that generate profits and grow over time.
Gold is not productive. It’s defensive.
Why People Buy Gold
There are three main reasons investors hold gold:
1️⃣ Inflation Hedge
When people fear currency losing value, gold often rises. Historically, it has held purchasing power over very long periods.
2️⃣ Crisis Insurance
During financial crises (2008, COVID shock), gold sometimes performs well because investors move toward perceived safety.
3️⃣ Portfolio Diversification
Gold doesn’t always move in sync with stocks and bonds, which can reduce portfolio volatility when held in small amounts.
Notice the theme: protection.
Not growth.
How Gold Has Actually Performed
Over very long periods:
• U.S. stocks have historically returned around 9–10% annually
• Gold has historically returned closer to 3–5% annually over multi-decade periods
Gold has long flat stretches. Sometimes decades.
That doesn’t make it “bad.” It makes it different.
Ways to Invest in Gold
If someone decides gold fits their strategy, here are common ways:
• Physical bullion (coins, bars)
• Gold ETFs (like GLD)
• Gold mining stocks
• Gold mutual funds
Each carries different costs, liquidity, and risks.
Owning physical gold means storage and insurance considerations. ETFs are easier but come with management fees. Mining stocks behave more like equities than pure gold.
The NurseMoneyDate® Honest Take
Gold can be a reasonable small allocation in a diversified portfolio.
Most evidence suggests:
• 0–10% allocation is typical
• It’s rarely the engine of wealth
• It’s more of a volatility smoother
If someone is buying gold because they believe “the system will collapse,” that’s often an emotional decision, not a portfolio strategy.
If someone is buying gold as one small piece of a diversified plan, that’s different.
The Bigger Perspective
The most powerful wealth-building tools in history have been:
• Ownership of productive businesses
• Compounding earnings
• Time in the market
Gold preserves.
Businesses grow.
Knowing the difference helps you decide what role, if any, gold should play in your own financial plan.