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Why Is Gold Controversial as an Investment?

gold investment controversial

Gold has been used as a store of value for literally thousands of years. And yet, when you tell someone you’re interested in gold today, you may get odd looks.

Likewise, the opinions of professional investors and financial advisors vary hugely when it comes to gold.

Some say you should invest in precious metals, while others say you would be best avoiding it all together.

Why is there so much controversy surrounding investing in gold?


1. Lack of understanding

People feel comfortable investing in things that they understand. When you purchase a stock, you are buying a small chunk of a profitable business — which makes logical sense.

When it comes to gold, it takes a bit more knowledge about the history of the metal to understand its value. Experienced gold investors understand that gold is rare, difficult to mine, and useful for a variety of applications.

To the average person, however, investing in gold can seem confusing, even pointless. This is the same reason why most people are resistant to investing in cryptocurrencies such as Bitcoin — when you don’t understand something, you are less likely to trust it or want to invest your money into it.


2. Conflicting advice

The financial world is full of people trying to give you advice — and often, experts have conflicting opinions on what you should actually be doing with your money.

Dave Ramsey said this, but Jim Kramer said this! Suze Orman said this, but Warren Buffet thinks this!

It’s enough to make your head spin.

The reality is that “expert” opinions differ greatly when it comes to most asset classes, but this is particularly true for alternative assets like gold or crypto.


3. All-or-nothing mentality

Many people assume that if someone invests in gold, they only invest in gold. The reality is that most of us hold gold as part of a balanced portfolio, including stocks, bonds, real estate and precious metals.

Diversification is vital when it comes to investing. This is why you will see almost every expert recommend proper diversification. Even investors that are really into precious metals don’t typically hold all their assets in metals.


4. Blind trust in the financial system

Most people blindly trust in the way things currently are. They have faith that the US economy will keep plugging along, and that the US dollar will hold its value. They have faith that inflation will stay low, and that their buying power will be preserved.

And perhaps they are right — the United States is a dominant power in the world, and the financial system has withstood the brutal affects of many financial panics, the Covid-19 pandemic, and more.

Nonetheless, it pays to have investments outside of the financial system — and particularly, investments that are independent of the US dollar. Gold, silver, and cryptocurrencies all fit this bill.


5. Barrier to entry

When it comes to investing, most people either don’t invest at all, or simply use their employer-sponsored retirement plan. Many lack the understanding — or interest — to make their own investment decisions.

Gold is something that takes a bit more effort to invest in. Many retirement plans don’t offer a way to invest in gold, although you can still use gold for retirement savings in other ways. And many people are intimidated by the idea of buying physical gold.


Ultimately, you should stick with your investing plan based on what you believe, and not give too much thought to what others think of your plans. In fact, it’s best to keep your finances to yourself, especially if you’re someone who owns physical assets like precious metals.

Want to continue investing in gold? Great — Bellevue Rare Coins is a great place to go for your precious metal needs.

Prefer to avoid precious metals? Great — investing in a wide variety of equities, bonds and real estate can produce great results in the long-run as well.

Thinking it may be a good time to sell some of your gold? Great — BRC pays top dollar for all precious metals, with 5 convenient Seattle-area locations.

People are going to believe what they want to believe — and the controversy in financial circles will continue. It’s up to you as an individual to decide how you want to invest your hard-earned money.


Disclaimer: This page is intended for informational purposes only. It should not be considered as financial or investment advice. You should speak to a certified financial professional to determine the best investment mix for your specific situation.

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