What you can own
Gold
A precious metal held as a store of value, with no yield and no cash flow.
How it works
Gold’s value rests on scarcity and on a very long history of being accepted as money. It has no earnings, pays nothing, and costs money to store.
It has protected purchasing power over very long periods and has been an unreliable inflation hedge over shorter ones. Its clearest historical role has been in currency crises and periods of negative real rates.
Where it misleads people
Gold has had multi-decade stretches of substantial real losses. Treating it as a guaranteed hedge against anything specific is not supported by its record.
Related terms
- CommodityA raw physical good — oil, gold, wheat, copper — traded in standardised units.
- InflationThe rate at which prices rise, which means the rate at which each pound or dollar buys less.
- Real returnReturn after subtracting inflation — the only measure of whether you got richer.
- DiversificationSpreading money across things that do not move together, so no single failure can decide your outcome.
More in What you can own
- Money market fund
- Funds from operations
- Preferred stock
- Common stock
- REIT
- Structured product
- Commercial paper
- ADR
All 10 What you can own terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.