Can buying gold really preserve its value? Gold investment strategies and risks.

International gold prices continue to set historical highs, breaking the $4000 per ounce barrier, which makes me wonder: is it really possible to preserve value by investing in gold now?

As a young investor, I am both curious and cautious about gold as an ancient investment tool. The older generation always says, "buy gold to preserve value," but after conducting in-depth research, I found that the reality is not so simple.

The Duality of Gold

Gold indeed has anti-inflationary properties. Looking back at the outbreak of the pandemic in 2020, countries printed money like crazy, and the price of gold skyrocketed from $1500 to today's $4000. Especially with the recent tariff policies introduced by Trump causing market uncertainty, it has further pushed gold prices to new highs.

But gold also has obvious limitations. As Buffett said, gold does not create any actual value and does not generate dividends or interest. In the past 50 years, gold has only had two significant bull markets, and during the rest of the time, its performance has been mediocre, with a really low return on investment.

I analyzed the trends of gold and the S&P index and found that there is no significant negative correlation between them. When the stock market declines, gold does not necessarily rise, which breaks my original perception.

Investment Method Comparison

After comparison, I found that different gold investment methods each have their advantages and disadvantages:

1. Physical Gold: Although it is a hard currency, it has poor liquidity and high storage costs.

2. Gold Savings Account: Low trading threshold, but high fees and no interest.

3. Gold ETF: Low investment threshold, low fees, but trading time is limited.

4. Gold CFD: Suitable for short-term trading, allows for two-way operations, but carries leverage risks.

I personally believe that gold CFDs are more suitable for modern investors because there is no need to hold physical assets, and they can trade both ways on a T+0 basis, with a low entry threshold of just $10. However, one must be cautious of the double-edged sword effect of leverage.

My Insights on Gold Investment

The investment return rate of gold is indeed not high, and this must be acknowledged. I believe that gold should be a small part of asset allocation, rather than a main investment. Experts recommend that gold investment should not exceed 5% of total assets, and I strongly agree with this.

For those looking to invest in gold, I have a few suggestions:

1. Clarify the investment purpose: Is it for investment returns, hedging, or simply holding?

2. As an alternative to cash assets: rather than expecting it to bring high returns

3. Seize specific opportunities: When economic uncertainty increases and inflation expectations rise, gold may perform well.

Gold prices are currently at a high level, and I believe we should not blindly chase after them. Even if holding gold for the long term, we should pay attention to short-term trading opportunities and respond flexibly to market changes to improve overall returns.

Investing in gold is not as simple as it seems; it is neither a万能的保值工具 nor a worthless metal. The key lies in understanding its characteristics and making choices based on your risk tolerance and investment goals.