Gold Investing: Is It Worth Owning?

It’s shiny and it’s precious, but is it worth owning in your investment portfolio?

The “Precious” Obsession with Gold

In the early 2000’s the Lord of the Rings trilogy dominated the box office, making nearly 3 billion dollars worldwide. One of the loathsome, and tragic characters in the trilogy was Gollum, once a normal hobbit, who was transformed into a monster by his obsession over a golden ring. He worshipped the ring, calling it My Precious.

It can feel like there is an obsession with actual gold in today’s investing. In fact, gold prices are up more than 40% in 2025, on pace for its best year since 1979, according to Yahoo Finance.

Gold and Market Growth in 2025

Gold is traditionally thought of as a safe haven, turned to when economic crisis looms. But, this run in gold has gone hand in hand with stock market growth.

So, what’s behind this golden growth, and is it time to consider it for your portfolio?

Why Gold Prices Are Surging

Yahoo Finance reports that gold prices have been driven up by expectations of the Fed lowering interest rates, and a weaker U.S. dollar. One investment strategist told Yahoo it’s being driven by central banks from around the world, that are buying gold to hedge their currencies versus the dollar.

The Speculative Nature of Gold

Before you buy gold for your portfolio, here are some things to remember.

Gold is a speculative investment. Gold is a precious metal, It’s price is not based on earnings, growth potential, and doesn’t pay dividends or interest. It’s value is based solely on what someone is willing to pay for it. That’s why there are so many ads out there wanting you to buy it. If it was such a great investment, why is everyone always selling it?

Gold’s Volatility vs. Stocks

Gold can be just as volatile as the stock market, and isn’t always a hedge. While the stock market is historically more volatile than gold over the long-term, gold often has just as strong of a price swing as the stock market in any given year. And just like now, when gold and stocks are both going up, there have been many times when both go down, making it difficult to call gold a hedge against the market.

Stocks Outperform Gold Over Time

Over a long period of time, the stock market has greatly outperformed gold. Since 1993, as an example, a $10 thousand investment in gold would be worth $92 thousand. A $10 thousand dollar investment in the S&P 500 Index, which you can’t invest directly into, would be worth nearly $300 thousand. There are periods of time when gold outperforms, but historically, the stock market is a better investment.

Bottom Line: Gold’s Place in Your Portfolio

Bottom line – gold may have a place in your portfolio, but your allocation to it, should depend on many factors. None of them should be fear.

Securities are offered through LPL Financial, Member FINRA/SIPC. GenWealth Financial Advisors is an other business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial.