why you should invest in gold
it's not just for pretty jewelry
You may notice a shift in focus starting with this issue. While I’ve spent the past year exploring midlife reinvention in broad strokes, I’m now narrowing in on personal finance especially for Gen Xers—what’s happening in the economy, how to make sense of it, and what we can do to protect and grow our money at a time when we may be considering retirement, looking for a different career, or just wanting to pay for fun experiences. Consider this a new chapter: practical, grounded, and (I hope) empowering.
If you don’t already have a position in gold, you might be wondering, why would I invest in that? It’s just a rock that can be mined from the earth. It’s generally not used for any industrial purposes. It is used for jewelry. It produces no cash flow. It has (seemingly) languished compared to the lauded buy-and-hold investment of our time: the S&P 500 index.
But gold may be just what you need in today’s trying times.
why gold (and maybe Bitcoin) looks like a smart bet right now
We’re seeing a seismic shift in the global economy, and capital is on the move. Not just any capital: serious, institutional, long-term capital. And it's moving out of the United States.
Why? Because the US, once the bastion of economic stability and a reliable safe haven, has started to look and act unreliable. No matter what move Trump and his advisors make next as they negotiate new trade agreements, they’ve made it clear to the rest of the world that you can no longer trust us.1
As you certainly already know, the current presidential administration has imposed extreme tariffs on virtually every major economic partner based on a nonsensical formulation of alleged trade unfairness. Whether this is a negotiating tactic or a true shift in ideology doesn’t matter. Markets have reacted with a sharp sell-off in US stocks and bonds, and a weakening dollar. It’s not just a correction. It’s a global reset in how governments (and in laggardly fashion, individual investors) think about where they should store capital.
the end of the safe haven?
Traditionally, when the world gets jittery, investors run to the dollar and US Treasuries. That reflex has underpinned global markets for decades. But this time, they’re running away. The trade war has created global uncertainty, but it’s also made clear that the US is willing to risk not just its own economy but the global system to make a point, or possibly bring about a macroeconomic revolution before the outlandishly large US debt takes the country down like so many empires before it.
If you're a foreign central bank—or just a cautious investor—this is a huge red flag. Why hold dollar-denominated assets if the US is actively undermining its own credibility? Capital is flowing out of the dollar, out of Treasuries, out of US stocks. The question now is: where does it go instead?
gold: the old hedge is new again
Gold doesn’t need earnings. It doesn’t need interest rates. It doesn’t need a functioning political system.2 It just sits there—storing value—regardless of what governments or central banks do. It’s the asset of last resort.
Gold was unpegged from the dollar in 1971. Since then, it's risen by over 900% in real terms (“real” meaning adjusted for inflation). That's a staggering return for something that doesn’t produce cash flow. And it’s actually outperformed the S&P 500 over that time frame, or at least kept pace depending on the inflation measure used. In other words, gold is not just a hedge. It’s a long-term performer.
Gold is the place to be in times of trouble. From 2000 to the mid-2020s, gold investments saw a ninefold increase, compared to the S&P 500’s sixfold.
This isn’t, for the most part, individual investors piling in.3 Central banks around the world, especially those in emerging markets, have been quietly accumulating gold for years. Now, in the face of U.S. instability, they’re accelerating that trend. If the dollar's role as the world's reserve currency is being questioned, gold is the natural alternative.
In fact, retail investors seem curiously uninterested or unaware of gold as a safe haven in these troubling times.In this morning’s Points of Return newsletter, Bloomberg’s John Authers writes that while total assets of the largest gold ETF the SPDR Gold Trust are at a record, that reflects the high gold price rather than the total number of shares outstanding.
consider bitcoin as well
There’s also a new contender for the role of safe haven: bitcoin. While still volatile, bitcoin is increasingly being seen as “digital gold.” It shares gold’s core virtue—scarcity—and adds portability and ease of storage. It's also politically neutral: no government can print more of it.
Bitcoin might not yet be ready for prime time in the eyes of large institutions, but don’t be surprised if that changes. The more the global financial system feels fragile and manipulated, the more attractive a decentralized, limited-supply asset becomes.4
what should you do?
If you're sitting in dollars right now or in dollar-denominated assets like S&P 500 ETFs and U.S. treasuries, you should be asking yourself: is there a better place to be?
For the first time in decades, the answer may not be clear.
Buying some gold—and perhaps even a little bitcoin—isn’t just about chasing returns. It’s about preserving purchasing power and hedging against a regime shift in global finance.
The financial world is realigning. The safest place to be might no longer be in the center. It might be in the timeless assets that have survived every cycle of excess, war, inflation, and mismanagement.
how to invest in gold (without going full pirate)
You don’t need to go out to Costco and lug home a gold bar. Physical gold has its place, but for most investors, it’s simpler and more liquid to buy gold through an ETF.
For direct exposure to the price of gold, consider ETFs like IAUM, IAU, or GLD. These funds track the spot price of gold and can be traded just like a stock in your brokerage account. They’re backed by physical gold and offer an easy way to hedge against currency risk or market volatility. IAUM has the lowest expense ratio, though I hold IAU just because I acquired it through my Schwab robo-portfolio at one point in time, but there’s enough of an expense differential that I may move into IAUM instead.
If you want a bit more upside and you can stomach the risk take a look at gold miners. Mining companies tend to outperform the price of gold when the metal rallies, but they also come with higher volatility and operational risk. Still, many gold miners are currently undervalued, which could offer real leverage if the price of gold continues to climb. A good way to get diversified exposure is through the ETF GDX, which holds a broad basket of gold mining stocks.
more to come
Some of the topics I’m planning to cover as I shift to personal finance for the almost-retired:
What exactly is Bitcoin and why should you consider holding it?
The risks of financial repression — might the U.S. government take steps to reduce its debt by channeling funds from you? And how to protect yourself from that possibility.
Is it possible to market time and make more money/lose less money than if you didn’t? A.k.a. is buy-and-hold investing a mistake in these times?
Guidelines for investing in non-U.S. stocks, and why you should be doing that.
I’d love to hear from you about what your personal finance concerns are, and how you are preparing for a new world monetary and macroeconomic order. Share in the comments or send me an email!
Anne Zelenka is a Gen X data scientist, artist, and writer who shares her observations on living successfully at midlife here and in other places around the web. You can follow her on Twitter or on Bluesky, check out her yearlong reinvention blogging at The Reinvention project, or visit her website, currently focused on her abstract art but could change any time!
For example, consider how Trump blew up a trade deal he created himself in his first term. The USMCA, or United States–Mexico–Canada Agreement, was the agreement that replaced NAFTA in 2020. It was intended to modernize North American trade by updating rules around digital trade, intellectual property, labor protections, and auto manufacturing. While it was a renegotiation pushed by President Trump during his first term, it ultimately provided a stable framework for commerce between the three nations. Recently, however, Trump has effectively blown up the agreement, threatening new tariffs and walking back commitments, which has reignited uncertainty in North American trade and further eroded investor confidence in U.S. economic leadership.
This isn’t quite true. If you hold gold through ETFs rather than as physical gold, there’s always a chance your government can take away its value with an executive order. Yes, the government can take your gold—history says so. In 1933, during the Great Depression, President Franklin D. Roosevelt issued Executive Order 6102, which made it illegal for U.S. citizens to hoard gold coins, bullion, or certificates. People were required to turn their gold in to the Federal Reserve at a fixed price under penalty of fines or imprisonment. The government then raised the official gold price shortly afterward, effectively devaluing the dollar. While such an extreme action may seem unlikely today, it's a reminder that in times of crisis, governments often rewrite the rules—and owning gold through an ETF may not protect you if access is restricted or taxed heavily. Some investors prefer holding physical gold for this reason, despite the logistical challenges.
In fact, individual investors appear curiously unaware of why they should have gold in their portfolios.
I’ll be writing about Bitcoin in a future newsletter, as it’s complicated enough to deserve its own treatment.