Gold hits $4,000 but stocks still win over time, top advisor says: 'Gold glitters but earnings compound'

Core Viewpoint - Gold has seen a significant price increase, reaching over $4,000 per ounce, but experts caution that it may not be a reliable long-term investment compared to equities and other assets [5][6][12]. Investment Performance - Gold's year-to-date increase is 51.6%, with forecasts suggesting it could reach $4,900 per ounce by the end of 2026 [5]. - Over a 30-year period, gold's annualized total return is 7.96%, while the S&P 500 stocks return 10.67% and real estate returns 8.89% [6]. Economic Context - Gold is viewed as a safe-haven asset during economic turmoil, such as government shutdowns and geopolitical uncertainty [9][12]. - Experts suggest that gold performs well in low-interest-rate environments and during financial instability [12]. Investment Strategy - Financial advisors recommend limiting gold exposure to a low single-digit percentage of portfolios, with some suggesting a strategic allocation of up to 10% in alternative investments [15][17]. - It is advised to gain exposure to gold through exchange-traded funds (ETFs) rather than physical gold [14]. Expert Opinions - Ray Dalio recommends allocating up to 15% of portfolios to gold, citing historical parallels to the 1970s [9][10]. - Other financial advisors emphasize the importance of equities as a hedge against inflation, highlighting their ability to generate earnings and dividends, which gold does not [8][7].