Gold pays no dividends, unlike stocks.
That’s another reason some investors reject gold as an investment.
The comparison is faulty.
Gold as an investment has always been meant to be a store of value. It protects your investment from inflation and other economic downturn. It was never meant to generate revenue or earn dividends.
It is the ultimate form of money.
If there is any ‘asset’ that gold may be compared to, it would be the US dollar.
Like the US dollar, gold pays no dividend.
Unlike the US Dollar, you can’t overprint gold. Only nature can make gold… and mother nature is not generous when it comes to gold.
It is that scarcity that is further pushing the price of gold upwards. What gold doesn’t have in dividends, it makes up for in value.
Gold has outperformed the S&P 500 so far this century, returning 86 percent more than the market if we index both asset classes at 100 on December 31, 1999.
Over the past 17 years, the S&P 500 has undergone two major contractions, both of them resulting in a loss of around 40 percent. Gold has held its value very well.
This is not to say you should convert all your investment to gold.
What we are recommending is diversification. An allocation of physical gold in one’s portfolio provides many benefits but ultimately it provides protection and resilience.