Gold vs Stock Market: which investment to choose?
Comparison of historical returns and the role of gold as protection.
Investing in gold versus the stock market is a classic debate in wealth management. Gold is a 'zero yield' asset (it produces no dividends), while stocks represent a share in a productive company.
The hedge role: Gold historically has a low or negative correlation with equity markets. In the event of a crash (2008, 2020), gold tends to preserve capital. It is an insurance policy against systemic risk and currency devaluation.
Long-term returns: Over 50 years, the S&P 500 has generally outperformed gold. However, in periods of high inflation (1970s or 2021-2023), gold often takes the lead. The ideal strategy is diversification: 5 to 10% gold in a portfolio of diversified equities.