Gold has been characterized as insurance, a hedge against inflation/social unrest/instability, or, more simply, just a commodity. But it is treated most of the time, by most people, as an investment.
This is true even by those who are more negative in their attitude towards gold. “Stocks are a better investment.” In most cases, the logic used and the performance results justify the statement. But the premise is wrong. Gold is not an investment.
When gold is analyzed as an investment, it gets compared to all kinds of other investments. And then the technicians start looking for correlations. Some say that an ‘investment’ in gold is correlated inversely to stocks. But there have been periods of time when both stocks and gold went up or down simultaneously.
One of the commonly voiced ‘negative’ characteristics about gold is that it does not pay dividends. This is often cited by financial advisors and investors as a reason not to own gold. But then…
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