Is Gold a Good Investment?
Is Gold a Good Investment? Capital Preservation, Valuation, and Opportunity Cost
Is Gold a Good Investment? Capital Preservation, Valuation, and Opportunity Cost
This week's blogpost - https://bahnsen.co/46j36GM
Host Blaine Carver interviews Brett Bonecutter about his article “Is Gold a Good Investment?” prompted by Rand Paul’s Fort Knox visit and frequent client questions about gold. They outline why investors are drawn to gold—perceived capital preservation, durability/rarity, mistrust of fiat currency and debasement, de-dollarization, and crisis “shock absorber” appeal—while noting gold’s short-term volatility. They discuss gold’s valuation challenge as a non-productive asset with demand largely driven by its role as a proxy for money, and argue gold tracks M2 money supply more than CPI inflation (World Gold Council cites only 16% of gold price variation explained by CPI). Historical math shows gold can outperform in certain periods, but long-term equities vastly outpace it (e.g., $100 in 1928 to 2025: gold ~$21k vs S&P with reinvested dividends ~$1.16M). They conclude heavy gold allocations generally don’t fit most goals due to opportunity cost, with only small allocations potentially tolerable.
00:00 Is Gold Worth It
00:58 Fort Knox Bond Story
03:45 Why Clients Ask
04:50 Gold Bug Intuitions
06:18 Capital Preservation Evidence
09:19 Durability Debasement De-Dollarization
12:12 Crisis Insurance Debate
14:24 Valuation Conundrum
19:02 Speculation And ETFs
22:53 M2 Versus Inflation
26:31 Just Do The Math
33:04 Volatility Correlation Costs
38:27 So Is Gold Good
44:53 Wrap Up And Outro
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