Why Gold Won’t Save You in a Real Crisis (But Stocks Will)

Omor Ibne EhsanSun, May 3, 2026 at 3:51 PM UTC

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The S&P 500 ETF SPY ([NYSEARCA:SPY](https://247wallst.com/companies/SPY/)) is up 244.87% over ten years while the gold ETF GLD ([NYSEARCA:GLD](https://247wallst.com/companies/GLD/)) returned 237.57% over the same period, but equities outpaced gold over multi-decade horizons because underlying businesses generate compounding profits; U.S. corporate profits hit $4,352.1 billion in Q4 2025 with 9.6% year-over-year growth.

Long-term investors with 20-plus-year horizons don’t need gold as a hedge because equity recoveries compound over time, while gold produces no cash flows and only functions as a store of value rather than a value creator.

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On a recent episode of The Investing for Beginners Podcast, co-host Andrew Sather offered a contrarian take on a piece of conventional wisdom that resurfaces every time markets wobble. Gold gets sold as a safe hedge that retains its value, and Sather pushes back on the leap from store of value to actual investment.

His framing is simple. "Just because something's a store of value doesn't mean it creates value," Sather said. "You buy a rock of gold, it's still a rock of gold like 2 years later." Stocks, by contrast, represent ownership in businesses that create profits, and those profits compound. There are no cash flows that gold produces, whether on its own or through any other means.

The Cash-Flow Case, In Numbers

The numbers from the Bureau of Economic Analysis make Sather's point concrete. U.S. corporate profits reached $4,352.1 billion in the fourth quarter of 2025, with year-over-year growth of 9.6%. Those profits span manufacturing ($759.6 billion), financial services ($897.1 billion), information technology ($317.7 billion), and retail ($415.8 billion). Real GDP grew at a 2% annualized rate in the first quarter of 2026, with exports up 12.9%. A bar of gold sitting in a vault generated none of this.

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That earning power shows up in long-run equity returns. SPY (NYSEARCA:SPY), the S&P 500 ETF, is up 244.87% over the past ten years and 424.91% since November 1999. GLD (NYSEARCA:GLD), the popular gold ETF, has run hot lately, climbing 36.38% over the past year and 237.57% over ten years. Gold can rip in specific windows. Over multi-decade horizons, equities have done the heavy lifting because the underlying businesses keep producing cash.

Time Horizon Is The Whole Game

Sather's broader argument is about duration. For investors with 20-year-plus time horizons, hedging with gold isn't necessary because the recovery math works out. "We can survive even like a Great Depression. If we had a Great Depression for the next 10 years... we'll come out of it and another 10 years we'll have recovered," he said. You can listen to the full discussion at The Investing for Beginners Podcast.

The recent volatility data backs up the resilience point. The VIX spiked to 31.05 on March 27, 2026, before settling back to 18.81 by April 29, a roughly four-week round trip from high fear to the normal range. SPY itself rose 12.6% over the past month as that fear normalized.

The Psychological Carve-Out

Sather grants the legitimate exception. "Maybe somebody close to retirement feels that need to hedge and needs that psychologically," he said. If holding some gold lets you sleep through a 30-VIX morning without selling equities at the bottom, the allocation pays for itself in behavior alone. The framework worth carrying away: match the asset to the job. Productive assets compound. Stores of value preserve. Knowing which one you actually need depends almost entirely on how long you plan to hold.

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Source: “AOL Money”