In the world of finance, there’s one investment that has consistently outperformed, yet remains largely ignored by the mainstream: gold. Despite its proven track record, gold is often overlooked in favour of more volatile and speculative assets. But as economic uncertainties mount, driven by global deficits, rising debts, and geopolitical tensions, the truth about gold is becoming harder to ignore.
At Gold Bullion Partners, we believe it’s time to reveal the secret that savvy investors have known for centuries: gold is the ultimate wealth preservation asset. Here’s why.
Gold: A Staggering Performance in the 21st Century
Gold has quietly but steadily outperformed many of the world’s most popular investments:
- Gold’s Growth: Since the year 2000, the price of gold has increased by 7.5 times. This translates to a compound annual growth rate (CAGR) of 9.2%, outpacing the Dow Jones, which has a CAGR of 7.7% (including reinvested dividends).
- Underappreciated Asset: Despite this strong performance, gold represents a mere 0.6% of global financial assets. This is astonishingly low, especially when considering gold’s historical role as a safe haven in times of economic turmoil.
Why Don’t More People Invest in Gold?
So, why is gold, with its remarkable track record, so underrepresented in investment portfolios? The answer lies in a combination of government policies, financial industry biases, and a general lack of understanding.
- Government Suppression: Western governments have long suppressed the virtues of gold. They prefer fiat currencies, which they can control and devalue at will, over a stable asset like gold that cannot be manipulated as easily.
- Currency Devaluation: Since the end of the gold standard in 1971, the value of major currencies like the British pound and the US dollar has plummeted by 97-99%. This devaluation is a deliberate act by governments to manage debt, but it comes at the expense of the purchasing power of ordinary people.
The Uncomfortable Truth About Fiat Currencies
Governments are unlikely to admit that they are systematically destroying the value of their currencies. The historical evidence is clear: no fiat currency has ever survived the test of time.
- Historical Precedent: Every single currency in history has eventually failed, from the Roman denarius to the German mark. The pound and the dollar, despite their current status, are not immune to this fate.
- Future Outlook: If history is any guide, the pound and other major currencies will likely lose another 97-100% of their value over the next 50 to 100 years. This makes holding cash or cash-equivalent assets increasingly risky.
The Investment Management Industry’s Blind Spot
The mainstream investment management industry is often reluctant to embrace gold. This is partly due to a lack of understanding but also because gold doesn’t fit well into the fee-driven business models of many investment firms.
- Commission-Driven Industry: Gold doesn’t generate the same level of commissions as stocks or bonds, which can be churned frequently for profit. This makes it less attractive to an industry that thrives on trading activity.
- Underperformance: Despite their reluctance, many investment funds underperform the market and could actually benefit from the stability and growth that gold offers. In fact, studies have shown that portfolios with a 10-15% allocation to gold tend to outperform those without, especially during periods of market stress.
The Unstoppable Drivers Behind Gold’s Future Surge
Several powerful forces are set to propel gold to new heights in the coming years:
- Global Deficits and Debts: The world is drowning in debt. The UK’s national debt exceeded £2.6 trillion in 2024, representing over 100% of GDP. In the US, the situation is even more dire, with national debt surpassing $33 trillion. As governments continue to borrow and spend, the pressure on fiat currencies will only increase, making gold an even more attractive asset.
- Geopolitical Tensions: From the ongoing conflict in Ukraine to rising tensions between China and the West, geopolitical risks are at an all-time high. History shows that during times of war and conflict, gold prices tend to rise as investors seek safety.
- Central Bank Purchases: Central banks around the world, particularly in BRICS countries (Brazil, Russia, India, China, and South Africa), are buying gold at record levels. In 2023, central bank gold purchases reached over 1,200 tonnes, the highest level in 55 years. This shift away from the US dollar as the world’s reserve currency is driving demand for gold.
- Social Unrest: Economic inequality and political polarization are leading to increased social unrest globally. In the UK, rising living costs and stagnant wages have sparked protests and strikes across various sectors. As social tensions rise, so too does the appeal of gold as a stable and secure store of value.
Gold: The Ultimate Wealth Preservation Tool
Gold is not just another investment; it is nature’s money—an asset that has preserved wealth for thousands of years. Unlike fiat currencies, which can be printed at will by governments, gold’s supply is finite, making it a reliable hedge against inflation and currency devaluation.
- Survival Through History: Gold has outlasted every fiat currency and government. Its value has remained relatively stable, even as empires have risen and fallen. This makes gold the ultimate tool for wealth preservation.
- Physical Gold as Insurance: At Gold Bullion Partners, we emphasize the importance of holding physical gold, not paper gold or ETFs. Physical gold should be stored outside the financial system, in secure vaults located in safe jurisdictions. This ensures that your wealth is protected, even in the event of a financial system collapse.
How Much Gold Should You Own?
With bubbles forming in nearly all asset classes—stocks, bonds, and property—allocating a portion of your portfolio to gold is not just prudent; it’s essential.
- Recommended Allocation: We recommend that at least 25% of your financial assets be allocated to physical gold and silver. For those particularly concerned about the current economic risks, this allocation could be even higher.
- Accessible to All: Gold is not just for the wealthy. You can start investing in gold with as little as £50 for a small gold bar or coin. Silver is even more accessible, with prices starting at just £20 per ounce.
Conclusion: The Secret to Long-Term Financial Security
As the global economy faces increasing challenges, the importance of gold as a wealth preservation asset becomes ever more apparent. Governments will continue to devalue fiat currencies, and financial markets will remain volatile. In this environment, gold stands out as the best-kept investment secret—one that savvy investors can no longer afford to ignore.
At Gold Bullion Partners, we are committed to helping you secure your financial future with physical gold. Whether you are new to gold investing or looking to increase your allocation, our team of experts is here to guide you.
For personalized advice on how to protect your wealth with gold, contact Gold Bullion Partners at 0207 031 8077. Discover the secret to long-term financial security today.
