Gold is up more than 50% year-to-date. Costco has been selling gold bars that fly off the shelves. The Discovery Channel’s hit show Gold Rush draws millions of viewers. And central banks around the world have been buying gold at record levels.
Demand is high—and the price reflects it.
So in today’s podcast, I want to dive into all things gold: what it is, what makes it valuable, why people invest in it, and my own philosophy about owning it.
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Articles, Links & Resources:
Dimensional Fund Advisors – Why Is Everybody Gaga For Gold Right Now?
Scientific American – Creating Gold in a Partical Accelerator
NASA Psyche Mission – Large Astroid Made of Metals
The story of Walter and his home filled with gold
Another story about Walter and his gold
The Gambler by Kenny Rogers video is below:
Transcript:
464 Let’s Talk About Gold – Should You Own It?
Announcer: Welcome back America to Sound Retirement Radio, where we bring you concepts, ideas, and strategies designed to help you achieve clarity, confidence, and freedom as you prepare for and transition through retirement. And now here is your host, Jason Parker,
Jason Parker: America. Welcome back to another round of Sound Retirement Radio.
You’re listening to episode number 464. The title is, let’s Talk About Gold, should You Own It? Gold is up more than 50% year to date. Costco was recently selling gold bars that were flying off the shelves. The Discovery Channel has a hit show called Gold Rush that draws millions of viewers and central banks around the world have been buying gold at record levels.
Demand is high and the price reflects it. So in today’s podcast, I wanna dive into all things gold. What is it? What makes it valuable, why people invest in it? And my own philosophy about owning it. But before we get started, I like to start the day by renewing our mind, and I have Proverbs 1616 that says, how much better to get wisdom than gold to get insight rather than silver?
And speaking of wisdom, why did the gold bar go to school? Because it wanted to be a little bit brighter.
Articles, links, and resources, and today’s show can be found@soundretirementplanning.com. Just click on episode number 464. It seems to me that there are a few key arguments for why people want to invest in gold. And here’s the list that I came up with. This is what I’m hearing from folks. It has scarcity.
It’s perceived as safe, it’s desirable, and people envy it. There’s a story or a belief system behind it. It offers some limited utility. There’s trust because of its long track record. People have confidence that will continue to maintain value over time, and recent returns have been really high. And a common behavioral investing mistake is to chase recent performance.
As we get into today’s episode, I also wanna define the two primary ways that I hear people talk about investing. You have speculation or gambling, which is driven by hope and timing, not necessarily by economics. You can speculate on anything. Stocks, gold, Bitcoin, even collectibles in speculation. There’s often no underlying engine of value creation.
No profits, no cash flow, no economic output. Instead, the price depends on a story. A belief, fear, or greed that causes people to want it. For the speculation to pay off. You must buy at the right time and sell at the right time. In other words, you’re relying on your ability to get in before others and get out before the story changes.
Investing is about owning real businesses that produce goods and services that make our lives better. These businesses generate sales, which become revenues, which after expenses become profits. We can measure their progress by looking at these fundamentals. When you buy a stock, you aren’t buying a lottery ticket.
You’re buying a share of a company’s economic engine, there’s a rational expectation of return because the business has the potential to grow, innovate, and earn more over time. As the company becomes more profitable and more people want to own it, demand pushes the price of its limited, shares higher, and that’s how ownership becomes more viable.
But ultimately, investing is about the power of compounding, the compounding of profits, reinvested earnings, and the long-term growth of a productive enterprise. That’s what drives real wealth creation. One of the first questions you need to ask yourself is, what kind of investor am I? Are you someone who looks for something inexpensive in hopes to sell it for a higher price?
Do you hunt for bargains at Goodwill and then flip ’em online? Or do you buy baseball cards because you think you know which ones will appreciate? Or maybe you collect classic cars believing that scarcity and demand will eventually push the price higher. These are examples of speculation. Speculators make money by buying things cheaply and hoping someone else will buy them later for more.
My dad was a speculator in Beanie Babies in the 1990s. Some were rare, some had limited production runs, and there was a narrative of artificial scarcity. We had a huge basket of beanie Babies in our house, and he believed it was an investment that would pay off someday. And it didn’t hurt that my sister enjoyed playing with them.
I’m not sure what happened to those toys, but I am pretty confident that his retirement was not improved by speculating on the plush animals. Gold, Bitcoin and many forms of crypto often fall into the same category. The primary bet. Or hope is that you can buy at the right time and later sell to someone at a higher price.
And in most cases, there’s no underlying economic engine producing cash flow to justify an expectation of higher returns. Now, gold’s an interesting case. It’s often described as a store of value. Not an investment that grows, but an asset meant to hold purchasing power over long periods. People sometimes say that 2000 years ago, a gold coin would buy you a suit of armor, and today a gold coin will buy you a well-made suit.
For some people owning gold isn’t because it will necessarily become more valuable, it simply maintains purchasing power. So when they buy gold, they’re not really trying to grow their wealth. They’re trying to preserve it. There’s nothing wrong with speculation, but it’s fundamentally different from investing in productive businesses that create economic value over time.
And that brings us to the second type of investor, the ones who prefers to buy and own shares of a real business. When you invest in a business, you are buying ownership in something that produces cash flow, generates revenues and profits, delivers goods and services, and grows in economic value. Over time, you’re participating in the company’s ability to innovate, expand, and compound its earnings.
When you speculate, you’re simply hoping someone else will pay more for what you bought. Here’s the key difference. Investments pay. You speculations require someone else to pay you. Let me put this in the form of a question. Imagine you have a rich uncle whose estate will be divided between you and your sibling, and you get to choose between two assets he owned.
Option number one is a stock worth $600,000. That produces a steady stream of income of $24,000 per year. Option number two, a collection of gold coins also worth $600,000 that sit in a safety deposit box. Remember, the stock represents ownership in a real business. So which one would you choose? If you’re like me, you’d gravitate toward the stock because it pays you simply for owning it.
The gold coins don’t produce anything. They just sit there. The only way to benefit is you have to sell some or all of them to someone else with the stock. You own a productive asset that generates income With gold, you’re holding something that only becomes useful when you find a buyer. Stocks are liquid, fast and cheap to sell.
Gold coins, not so much. Expect higher fees, less price, transparency, and more hassle when it’s time to find a buyer. In today’s world, beliefs and stories can move prices faster than earnings ever could, but long-term value still comes from what something does not what people feel about it. Scarcity alone shouldn’t determine value.
Just because Beanie Babies or Cabbage Patch kids were once hard to find, didn’t mean that they would hold their value over time. Narrative belief, scarcity can create excitement and temporary increases in price, but cashflow and productivity are what create lasting long-term wealth. Okay, so now let’s talk about gold.
What is it really? Gold is a precious metal. It doesn’t tarnish, it doesn’t rust, and it’s soft enough to be shaped or molded. It’s visually striking and it’s been admired for thousands of years. Gold is considered a store value, meaning it’s expected to hold its purchasing power over long periods of time.
In terms of practical use, gold has limited utility. It’s used in jewelry. Some dental work and in electronics because it’s an excellent conductor that doesn’t corrode. But beyond those few applications, its value is largely emotional and psychological. For thousands of years, people have trusted gold as a reliable store of value.
It has survived wars, regime changes, and economic cycles across generations, and that long history still shapes people’s belief in it. Today, at one point, gold even backed the US dollar. During the Great Depression in 1933, president Franklin Roosevelt issued an executive order outlying private ownership in most forms of gold.
Americans were required to turn in their gold coins, bullon and gold certificates to the government. In 1971, under President Richard Nixon, the United States left the gold standard. Foreign central banks could no longer convert US dollars into gold, and from that point forward, the dollar became a fiat currency.
Backed not by a physical commodity, but by the full faith, credit and monetary discipline of the United States government. The ban on private gold ownership stayed in place until 1974 when President Gerald Ford signed legislation making private ownership of gold legal. Again, it’s worth asking if a president could issue an executive order in the past, requiring Americans to surrender their gold, is it impossible to imagine something similar happening again?
Part of Gold’s enduring appeal is its scarcity. It’s rare, it’s difficult to find, and it’s expensive to mine. And for most of human history, we believed you simply can’t make more of it. But 1983 scientists at the Lawrence Berkeley National Laboratory actually created gold in a particle accelerator. The catch it cost far more to produce than the gold was worth.
In an age of rapid technological change and artificial intelligence, it’s fair to ask, could AI eventually discover a cheap way to manufacture gold? And if that happened, would gold still hold its value once scarcity disappears? In October, 2023, NASA launched the psych mission to explore a massive metallic asteroid orbiting between Mars and Jupiter.
An object roughly the size of Massachusetts, about 173 miles long and 140 miles wide. Some scientists believe it could contain large quantities of heavy metals, potentially including gold and nickel iron alloys, similar to Earth’s core. If this asteroid does indeed contain gold or other precious metals, it wouldn’t really matter because we don’t currently have the technology to mine asteroids.
But imagine a future where we could, if gold became abundant, whether through inexpensive manufacturing or accessible space mining, would it still be considered precious? Would it still hold its value? Now, these are thought experiments. They’re not forecast, but they illustrate an important point about scarcity and value.
Of course Diamonds offer an interesting comparison. In 1954, we first learned how to manufacture diamonds, and by 2010, we can now manufacture them in labs, chemically identical, visually identical, often higher quality than natural diamonds. Yet natural diamonds still hold value. Why? ’cause scarcity isn’t always physical.
Sometimes it’s about perception, story, brand, and trust. People believe natural diamonds are more special, more meaningful, or more real, and that belief is strong enough to preserve their value. Despite abundant lab made alternatives. According to a recent article by Avantis from 1928 through 2024, gold delivered an average annual return of about 6.75%.
During that same period, US stocks returned 11.93% in corporate bonds, 6.9%. So simply owning stocks or bonds would’ve generated higher returns historically, over that long period of time. Dimensional also released research looking at gold from 1970 through June of 2025, and a few things stood out to me.
First inflation CPI averaged 3.9% over that period. That means that $1 in 1970 required approximately $8 and 56 cents in 2025 to maintain the same purchasing power. Gold during that same period grew at 8.5% per year, turning $1 into $93 and 49 cents. So if the choice were between holding dollars in a savings account or holding dollars in gold, gold clearly preserved and even increased purchasing power, and at first glance, an 8.5% return sounds really excellent.
But during that same time, the s and p 500 averaged roughly 11% per year. And when you think in terms of dollars rather than percentages, the comparison becomes even clearer. So if you buried a dollar in your backyard, you lost purchasing power. If you had $1 invested in gold, it grew to $93 and 49 cents, and $1 invested in s and p 500 grew to about $322.
Not only was performance in stocks dramatically better, but owning stocks means participating in real economic growth, the innovation productivity. Value creation of businesses that make the world better. Of course, past performance is no guarantee of future performance. Gold may help preserve purchasing power, but historically stocks have been a far more effective tool for building long-term wealth.
Gold relies on what someone else will pay. Stocks rely on the economic engine of business. Some people talk about gold as a safe asset or something that reduces volatility, but the historical data tells a different story. Dimensional recently reported that from 1970 through 2024, gold had negative calendar years, 22 times or about 40% of the time.
Over that same period, US stocks had negative returns only 11 times or roughly 20% of the times. In other words, gold has been twice as volatile as the s and p 500. Now, stocks can certainly have difficult stretches, and one of the most recent examples was a period from 2000 through 2009, the.com crash, which was followed by the financial crisis, which we call the loss decade.
When the s and p 500 essentially broke even over an entire decade, but gold has had similar 10 year periods of disappointing returns. Here’s a look at the longer term numbers, and this is where it really gets interesting. The s and p 500, there has not been a 15 year period of negative returns in nominal terms, but if you look at gold from 1980 through 1995, gold returned negative 3.6% over a 15 year.
Period, or from 1980 through 2000, a 20 year stretch, gold, uh, returned negative 4.3%. There has never been a 20 year period where the s and p 500 was negative, but gold has had 20 year periods with negative returns for someone who’s retired or entering retirement. Getting the timing wrong could mean enduring a 15 to 20 years of negative returns, a scenario that can significantly damage a retirement plan.
Another interesting data point. When Gold has had strong 12 month returns of around 40%, something that has happened multiple times, the average return over the following 12 months has been negative. So will Gold’s recent outperformance continue? It’s impossible to predict with certainty, but if history is our guide, we should probably temper our expectations for gold going forward.
Should you own gold? In my first book, I talked about owning commodities as a potential hedge against inflation, but the idea was to own a basket of commodities, not a single asset, and to keep that allocation small, typically less than 5%. That’s a reasonable approach for diversification during periods of high inflation.
But when someone takes a large position in gold or crypto, they’re no longer hedging. They’re speculating on price movement, and if your retirement depends on the performance of your assets, you need to be extremely careful. If more than 5% of your retirement portfolio is in crypto or gold, I’d say you’re taking a pretty significant gamble.
At Parker Financial, we don’t believe in gambling as a strategy. We believe in investing. Investing means owning productive assets that generate income, create value, and compound over time, not relying on hope, timing, or speculation. If owning 5% or less of your liquid assets and speculative investments helps to reduce your fear of missing out, or serves as a regret management tool, or simply gives you something fun to talk about at the Christmas party, that’s fine.
If a small allocation helps you stay committed to your real investment portfolio, it actually can be useful. But don’t let your emotions around speculation undermine your long-term retirement strategy. A little speculation for entertainment is one thing. Letting it drive your financial future is another.
Because gold doesn’t produce earnings, pay dividends, or generate cash flow, its price is driven purely by supply and demand. By whatever someone else is willing to pay for it. And recently, demand has been strong. In October of 2022, an ounce of gold traded around $1,655. By the end of October, 2025, it was roughly $4,023.
A 143% increase in just three years. For comparison, the s and p 500 rose about 84% as a total return, including dividends over that same time period. Dimensional recently analyzed gold’s long-term performance and found that since 1970 Gold posted a positive annual return about 60% of the time, the s and p 500 around 80% of the time.
So you can see the pattern. Gold has been less reliable at producing positive returns, and the returns it has produced over the long run have been meaningfully lower than the returns generated by owning stocks, real businesses with real earnings and real economic growth behind them. The recent returns for gold are undeniably impressive, but one thing I’ve noticed in today’s world is that people tend to chase whatever just went up.
We saw it with meme stocks, we’ve seen it with crypto, and now we’re seeing it again with gold. Narrative scarcity, fear and greed are some of the most powerful forces behind price bubbles. We build stories to justify why something should be valuable, and scarcity often becomes the evidence we point to.
Fear becomes the fuel pushing people to act before they feel it’s too late, and then greed kicks in as the price rises. Tempting people to jump in because of the past performance of returns looks irresistible. Take the common narrative around gold. You’ve got rising debt and deficits, which suggest the world may eventually lose confidence in the US dollar as a global reserve currency, and some point to foreign central banks buying large amounts of gold as evidence.
Gold is a timeless store of value, something that will hold up even if the US economy stumbles Gold has been treasured for thousands of years, so naturally it will continue to be valuable in the future, and gold is scarce. Unlike dollars. You can’t simply print more of it. And it’s a compelling story, and scarcity is a powerful idea.
It’s the same argument that drives much of Bitcoin’s appeal. There’s only gonna be 21 million coins that ever exist. Therefore, it must be valuable. Bitcoin is often promoted with the same fear narrative. The dollar could collapse. But scarcity and fear alone, do not guarantee lasting worth. Remember the non fungible tokens, NFT Mania and the Bored APE explosion, that was digital scarcity created outta thin air prices skyrocketed, then collapsed.
Think back to the baseball card boom of the late 1980s. Some rookie cards sold for $200. Based on the hype and excitement. Today, you can buy that same card for about $5. The story faded. The player never lived up to the promise. The scarcity wasn’t real, and then the value evaporated, and it’s a powerful reminder.
Narrative and scarcity can create excitement. But without durable economic value behind them, the story eventually breaks. Belief alone doesn’t build enduring wealth. And here’s something I’ve noticed over and over again. Fear sells. The more anxious investors become about the future, the more gold seems to move.
When people explain why they buy gold, the reasons almost always revolve around uncertainty, collapse or crisis, rarely around optimism or productive growth. Fear can create urgency, but long-term wealth comes from owning productive assets that create value, not simply assets that soothe fear. And investing isn’t just about what goes up in value, it’s about your belief system, how you choose to think about the world and how we think determines how we act.
If you could choose to be optimistic about the future or pessimistic about the future, which would you choose? If you could bet that America will continue to thrive and lead, or that it’s on its way out? Which belief would you support with your thoughts and actions? And if you choose optimism over pessimism, where would you invest?
How we think about the future shapes, how we live in the present. Let’s look at an extreme example. I want to tell you a story about a man named Walter. Walter retired relatively young. He lived quietly for 30 years in a small home. He had no debt. He never married and rarely went outside. He covered his windows with cardboard and foil so that no one could look in.
He shopped at night to avoid people. When neighbors stopped seeing him, and a strange smell began to emerge, police finally entered his home. Walter had passed away. He was 69 years old. He had $200 in his bank account. But what they found inside the house was astonishing boxes labeled books were filled with gold coins, bars of gold hidden in an old washing machine, gold buried in the crawlspace Altogether, over $7 million in gold was found in Walter’s home.
And as I thought about Walter’s story, I couldn’t help but ask, was he truly safe? Was he happy? Did he have peace of mind? You see safety as a worthy goal to a point, but it can become an obsession. And when the pursuit of safety becomes driven by fear, it can cost us more than money. It can cost us connection, community, joy and hope.
Maybe Walter thought he was being prudent. Maybe he thought he was preparing for the worst, but from the outside it looked a lot like fear had won. There is a price for making decisions based on fear. Maybe the investment returns are good, but if the returns meant that you had to live like Walter, would it be worth it?
Warren Buffett is often quoted as saying, gold gets dug outta the ground in Africa. Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. If you buy one ounce of gold today, you will own one ounce of gold 10 years from now. My belief about investing is simple.
You’re buying ownership in a business that makes people’s lives better. Businesses produce goods and services, create jobs, own assets, generate revenue, and pay profits to shareholders, gold, Bitcoin, baseball cards and Beanie Babies. They don’t do that. When you buy gold, your only hope of profit is that someone will pay more for it later.
And hope is not an investment strategy. That’s the truth. So while you might make money trading gold, you’re not investing, you’re speculating. A common narrative is that you should buy gold so that when the financial system collapses under massive debt, you’ll be able to trade your gold for the things that you need.
But let’s be honest, if the entire system truly collapsed, I wouldn’t want your gold. I’d want seeds for my garden, fuel for my generator, clean water, and maybe even ammunition so I could hunt and protect my family in a real collapse scenario. Utility would matter far more than a shiny metal. There’s just no way I’m gonna be trading my carrots for flakes of your gold.
It just won’t happen that way. And this zombie apocalypse mindset is more harmful than helpful. Fear-based thinking can cause people to focus so much on the worst case scenario that they miss out on the opportunities growth and the good things that are happening all around them. Excessive pessimism.
Maybe one of the great contributors to financial poverty, not because danger is impossible, but because fear often prevents people from investing in the very things that build long-term prosperity. When you’re so focused on surviving, you miss out on thriving. So based on everything we’ve talked about today, the real question becomes how will you think?
How will you live, and what will you do? And ultimately, how will you invest? Will you choose to own businesses that create value? And pay you to hold them, or will you speculate on price and hope that someone else pays more later? Buying gold or Bitcoin isn’t just a financial decision. It reflects a belief system.
It speaks to how you view the future with confidence and optimism or fear and collapse in mind. And just because something rises in price doesn’t make it worth investing in. One of the challenges today is that many people don’t understand the difference. Everything gets lumped together as investing, and the only metric becomes whether the price goes up tomorrow.
In that world, owning a great business, or for that matter, all the businesses, becomes no different than owning a token or a shiny metal as long as the price moves. But that’s not how I wanna live. I don’t go to casinos because I work too hard for my money to gamble it and call it entertainment, and I don’t buy Bitcoin just because it’s scarce or because someone labeled it as digital gold.
Scarcity alone isn’t a reason to own something. For me, knowing the difference between investing and speculating guides where I put my capital, regardless of the hype, the fear, or the storyline. When you invest in businesses, you’re becoming a partner in human ingenuity. You own a share of people working every day to make life better, delivering goods and services that improve the world.
You benefit from innovation, productivity, and economic growth. And that’s really different than trying to out guess someone else’s emotions tomorrow. And I’ll leave you with a line from Kenny Rogers, A reminder of what life looks like when you’re gambling. You’ve gotta know when to hold them. Know when to fold them.
Know when to walk away, and know when to run. When you speculate, you’re always watching the door. When you invest in real businesses, you get to build wealth with patience, optimism, and purpose, and you don’t have to live your financial life looking for the exit. So let’s recap. Gold is speculation, a bet on what someone else will pay you in the future.
Stocks are investments, ownership, and real. Businesses that produce goods and services generate revenue and earn profits. From 1928 through 2024, stocks and bonds both outperformed gold from 1970 through June, 2025. Gold earned about eight and a half percent per year while stocks earned roughly 11%. And since 1970, gold has had positive calendar year returns about 60% of the time compared to 80% for stocks, suggesting that gold isn’t nearly as safe as many people believe.
Stories influence how we think and how we act. If you’re gonna choose a story to live by, choose one. Built on hope, not collapse. It really is a choice, and frankly, it’s a better way to live. Scarcity alone is not a reason to invest. If you’re gonna model an investor, be more like Warren Buffett than Walter.
Investing in business is a bet on human ingenuity and long-term economic progress. Investing in gold is often rooted in concerns about the future and uncertainty about the stability of the economic system. Investing in gold can feel like playing musical chairs. You’re hoping to get a seat when the music stops.
Investing in stocks is like owning a growing orchard. The trees keep producing fruit year after year. Choose to be an investor, not a gambler. And I’m reminded of that line from the song The Gambler from Kenny Rogers. He says, ’cause every gambler knows that the secret to surviving is knowing what to throw away and knowing what to keep in investing as in life.
Wisdom comes from knowing the difference.
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And does not constitute a solicitation for any securities or insurance products. Please consult with your financial professional before taking action on anything discussed in this program. Parker Financial, its representatives or its affiliates have no liability for investment decisions or other actions taken or made by you based on the information provided in this program.
All insurance related discussions are subject to the claims paying ability of the company. Investing involves risk. Jason Parker is the president of Parker Financial LLC, an independent fee-based wealth management firm. Located at 9 2 3 0 Bayshore Drive Northwest Suite 2 0 1, Silverdale, Washington. For additional information, call 3 6 0 3 3 7 2 7 0 1 or visit us online@soundretirementplanning.com.
