Why We Don’t Invest in Gold

Gold just hit another record high — over $4,000 an ounce.

Investors are running for the exits, fleeing the dollar for gold, silver, and even bitcoin. Wall Street calls it the debasement trade, a bet against inflation, government debt, and political chaos.

Every few years, we see the same movie. 

Something shakes investor confidence, gold takes off, and headlines scream about the end of the dollar.

But when the dust settles, one truth always remains: gold might glitter, but it doesn’t grow.

Warren Buffett once said:

“Gold gets dug out of the ground in Africa, or somewhere. Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility.”

That’s about as clear as it gets.

Gold doesn’t produce a product. It doesn’t employ people, innovate, or earn profits. It just sits there, hoping someone will pay more for it in the future.

If you own an ounce of gold today, you’ll have one ounce of gold in 50 years. That’s it. 

Compare that to owning a great business, such as Apple, Microsoft, or Alphabet. These companies produce goods and services people want. They earn profits, reinvest them, and create even more value year after year.

That’s the key difference between storing wealth and creating it. Gold stores wealth — maybe. Great businesses grow it.

Let’s put some numbers behind it.

In 1975, gold sold for about $140 an ounce. Today, it’s roughly $4,000. That’s approximately a 30X increase.

However, the S&P 500, a simple basket of American businesses, has increased nearly 340X  that same period, including dividends.

$10,000 in gold is now worth around $250,000.

$10,000 in American businesses grew to nearly $3.4 million.

That’s not speculation, it’s compounding.

Businesses innovate. They grow earnings. They raise dividends. Over time, that snowballs into serious wealth.

Gold, on the other hand, has long periods, sometimes decades, where it remains stagnant. After peaking in 1980, gold lost more than half its value and didn’t hit new highs again for 27 years.

Investors who bet on fear missed out on the greatest bull market in history.

Every gold rush is driven by fear.

In the 1970s, it was inflation. 

In 2008, it was a financial collapse. 

Today, it’s government debt, rate cuts, and politics.

Yes, the world feels uncertain, but when has it ever been certain?

There’s always something to worry about. Yet, through wars, recessions, and crises, great businesses continued to grow.

Fear may drive short-term spikes, but it never builds long-term wealth.

Once the panic fades, gold’s gains evaporate. That’s what happened after 1980 … after 2011 … and it’ll happen again.

Investors who chase fear end up paying a high price for “safety.”

Owning part of a productive business is owning a piece of human progress.

Every innovation, from smartphones to electric cars, came from businesses serving customers better than before.

That’s why I focus on owning companies in industries that have a tailwind, are run by outstanding CEOs, and have rock-solid financials, and I buy them at great prices. 

They create value every single day, not by sitting in a vault, but by working, producing, and compounding.

Gold can be a small insurance policy, but it’s not an investment. 

It doesn’t create jobs, pay dividends, or drive the economy forward.

So while others chase the next “safe-haven” trade, I’ll keep putting my money where it’s always multiplied best — in great American businesses.

Because gold may glitter for a while… But business growth shines forever.

If you have questions, you can send them to me at [email protected].

And follow me on X here for daily updates.

Regards,

Charles Mizrahi
Prosperity Insider

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