Hey Taylor – It’s that time of year again when the economy is freaking me out and I wonder if I need to own a bunch of gold. Should I be buying gold? When and why do people buy gold, and is that time now? – Buddy

Hey Buddy – You’re right, it is that time of year again! It seems like every time the economy starts looking shaky, people start wondering if they should trade in their stocks for gold bars and prepare for the Wild West. Let’s talk through when and why people do, so you can decide what makes sense for you.

–1. A steady option. Gold is often seen as a safe haven. When markets are volatile or inflation feels like it’s spiraling, gold tends to hold its value better than some other investments. That’s because people see it as a store of value—unlike stocks that can swing wildly, gold just sits there, unchanged, and that stability is reassuring. Historically, gold has also been a hedge against inflation. As the cost of living rises and currency values fluctuate, gold tends to retain purchasing power over the long run. So in times like these, when inflation is a concern and the markets feel uncertain, it makes sense that gold looks appealing. But…

–2. Not a money maker. Gold may hold its value and even appreciate in tough times (it’s up over 10% since the start of 2025), but it doesn’t generate income or compound like stocks do. You can’t rent it out or earn dividends from it—it’s just there. If you compare a long-term investor who holds a diversified portfolio to someone who only holds gold, the investor with market exposure will probably come out ahead over time.

–3. So, is now the time? Gold may be a good addition to a portfolio, especially when things feel uncertain. It has historically done well when other assets are struggling, which can help bring peace of mind. But the biggest reason people buy gold is panic—and emotions aren’t always the best guide for financial decisions. If your portfolio is well-diversified with solid investments, history suggests you’ll ride out the storm and come out ahead. Gold might play a role in that, but it’s probably not the key driver of your long-term success.

If you’ve got $3,000 to invest and feel like adding an ounce of gold, it could be one way to diversify. If you don’t get around to it, you’re probably going to be okay. Thanks for the question!

TAYLOR J KOVAR
CHIEF EXECUTIVE OFFICER
CERTIFIED FINANCIAL PLANNER™