Investing in Gold: A Timeless Asset
By: Max ValaVanis, CFPⓇ
Gold has captivated human interest for millennia, not only for its beauty but also for its unique physical and chemical properties. These characteristics have made it invaluable in various industries, from electronics to aerospace. Despite its utility and its prevalence in society, gold remains remarkably rare. According to the World Gold Council, if all the gold mined throughout history were melted into a single cube, it would measure just 73ft on each side!
Gold’s excellent conductivity and resistance to tarnish make it an ideal metal for many uses. It’s commonly found in connectors, switches, and other critical components of electronic devices. Moreover, gold can be applied to dentistry and medicine where it is used for crowns and drug delivery. The practical uses of this metal appear to be ever-expanding! Meanwhile, gold is still a cornerstone in many investors’ portfolios. Some people may keep gold bullion or coins in their safe. In contrast, others invest directly in gold ETFs (Exchange Traded Funds) on the stock market. While both avenues have their advantages and disadvantages, one fact remains: people love gold.
Recently, the gold market has been a highlight in the financial industry. As of May 15th, the precious metal’s value has risen 20% year-to-date! Vastly outproducing the overall United States stock market, which in the same period barely eked out a gain. Gold’s recent surge is a product of many interconnected economic and political events. The ongoing trade discussions between the United States and many global economic superpowers, plus a weaker US dollar, are two driving forces towards the recent increase in gold valuation. As a result, we are seeing the central banks of many countries shift towards garnering large amounts of gold. This shift also adds additional scarcity in the gold supply.
While gold is often considered a stable investment, it’s not without volatility. Historical data suggests that, at times, gold is more unpredictable than the United States stock market. Therefore, one of the main advantages gold gives an investor is diversification. Due to the low correlation of returns between the stock market and the metal, many investors choose to diversify their investments with strategic allocations of gold. For example, the beginning of 2025 was lackluster for the stock market, but gold has seen a recent surge in price. In other years, the opposite has occurred. In 2013, gold prices fell 28% while the overall stock market climbed upwards of 30%!
As with any investment, the devil is in the details. Sometimes people can be swayed by recent jumps in prices or by misinformation. We urge you to conduct your due diligence, as everyone’s investment situation is unique. If you would like assistance in doing so, or if gold interests you, give our office a call. We offer free, no-obligation appointments for all readers of the Senior Scene. We can meet at our Melbourne or Rockledge offices or via Zoom. You can call ValaVanis Financial at (321) 956-7072.
Securities offered through J.W. Cole Financial, Inc. (JWC) Member FINRA/SIPC. Advisory services offered through J.W. Cole Advisors, Inc. (JWCA). ValaVanis Financial and JWC/JWCA are unaffiliated entities.