Gold is frustrating – but it’s still worth holding

It's been a frustrating time for investors in gold. But the idea that you should always have a bit of physical gold in your portfolio and just hope that it doesn’t go up remains a sound one.

Hands holding a gold bar wrapped in the FT
Gold: frustrating, but worth having
(Image credit: © Getty Images)

As regular readers will know, we’re long-time fans of gold here at MoneyWeek. But there’s no doubt that it can be a frustrating asset. As Dominic says in this week’s cover story, the idea of owning gold as “portfolio insurance” can sometimes feel like poor consolation for those who would rather see it (and the shares of the companies that mine for the stuff) shooting the lights out. I can sympathise – I still hold gold mining funds in my portfolio in the expectation that they still haven’t seen their highs for this cycle, but for all my bullishness, I’d be deluded not to acknowledge that if I’d sold them a year ago I could be buying back in at about a third less now.

Yet the insurance argument – that you should always have a bit of physical gold in your portfolio and just hope that it doesn’t go up – remains a sound one. And while I don’t want to be overdramatic, there are some particularly pertinent reasons right now to believe that insuring against nasty surprises is a good idea.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.