Gold & Silver Offer a Greater Upside Than Equities

Gold & Silver Offer a Greater Upside Than Equities

Gold has outperformed equities in the short run, the long run, bear markets, and bull markets. Looking at the chart below, it becomes clear that gold has meaningfully outperformed the stock market over the last 20 years. Gold has undoubtedly outperformed the stock market since the beginning of 2020.

Gold has served as a superior hedging asset during periods of crisis. As shown in the chart below, gold provided a more substantial hedge than Treasury Bonds in nine of the eleven major crisis events.

History clearly shows that portfolios that include precious metals outperform portfolios without precious metals. A 20-year study that reduced the 60/40 stock/bond portfolio in equal amounts by adding increasing percentages of gold (55/35/10). The results of this study show that portfolios with a 10% allocation of gold outperformed those with less or no exposure to gold.

This outperformance results from combining a steady long-term return with reliable hedging characteristics. To claim otherwise would completely ignore historical data and investment results.

Gold allocations of 2%-10% in a typical pension portfolio have provided better risk-adjusted returns than those with broad-based commodity allocations

Investors have long recognized the benefits of investing in commodities. Over time, they have been shown to improve portfolio risk-adjusted returns, offering diversification, inflation protection, and an element of smoothing across economic cycles.

Warren Buffett once stated that ‘gold has no utility.” Warren Buffett’s statement is not valid. Gold serves as money and a global medium of exchange. Gold shares the stage with the U.S. dollar as a reserve currency. Moreover, gold has outperformed Berkshire Hathaway (Class A shares) in each of the last six market crashes.

Investing in physical precious metals is a great way to own a physical asset that can reduce the overall risk of your portfolio. Owning a physical asset – one that you can hold in your hands – eliminates the risk of a third party.

An allocation of precious metals in your portfolio provides many benefits. Owning precious metals provides protection and resilience from the uncertainties that life throws at us. Gold and silver can both protect and grow your wealth while helping you weather inevitable economic crises. History has been telling us this very truth for thousands of years. It’s time you start to listen.

The Rise and Fall of the U.S. Dollar >
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