Smart Investments: Should Average Investors Hold Gold Now?

Is Gold A Smart Investment For The Average Investor Today?

Gold’s shine is back in the spotlight after a dramatic 65% run, but the better question is why it moved and where it fits in a thoughtful plan. We dig into the tension between gold’s timeless role as a store of value and the realities of modern markets shaped by fiat currencies, central banking, and policy cycles. Along the way, we unpack whether gold is “money” or simply another asset class, and why that distinction matters when fear rises, rates shift, or headlines stir anxiety.

Jeff Bingham walks through the big turning points: the 1971 break from the gold standard, the expansion of government debt, and the mechanics of money creation that shape investor psychology. We examine how central banks and wealthy investors accumulate and store bullion, what that signals about trust and geopolitics, and why the dollar can remain the reserve currency for a long time while gold still serves as a credible hedge. Expect clear takeaways on what actually drives gold’s price—real yields, risk sentiment, and scarcity—versus the myths that cloud judgment.

For everyday investors, we get practical. You’ll hear a straightforward sizing idea around a small 2.5% slice, guidance on how to choose between physical gold, ETFs, and miners, and a simple rebalancing approach to keep gold a tool rather than a prediction. We also weigh opportunity costs during higher-rate environments and outline the conditions that tend to support or cap gold’s momentum. If you want a nuanced view that cuts through hype and helps you decide whether gold earns a place in your portfolio, this conversation delivers clarity without the jargon.

If this resonates, follow the show, share it with a friend who’s debating bullion versus ETFs, and leave a quick review with your biggest takeaway. Your feedback helps more investors find smart, steady guidance.

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Securities and advisory services offered through Silver Oak Securities, Inc., Member FINRA/SIPC. Silver Oak and B&H Wealth Strategies are not affiliated. http://www.finra.org/ http://www.sipc.org/

Transcript

Welcome And Setup

SPEAKER_00 0:03

Welcome to the Four Seasons Podcast, brought to you by BH Wealth Strategy, serving Northeast Tennessee and Southwest Virginia since 1966. Here, we guide you through the ever-changing seasons of your financial journey, offering insights to help you grow, protect, and enjoy your wealth. Ready to turn your financial dreams into reality? Dare to dream. And now, here's your host, President of BH Wealth Strategy, Jeff Bingham.

SPEAKER_01 0:43

Gold has always carried a certain shine, but is it still the right move for everyday investors? Welcome back, everybody. Skip Monty back in the studio with president of BH Well Strategies, Mr. Jeff Bingham. Jeff, how's everything going on in your world today?

SPEAKER_02 1:00

It is going well, Skip. Thanks for asking. How about yourself? How are you doing?

SPEAKER_01 1:04

Doing well, doing well. Excited about the new year and investment opportunities, and which begs a question for today's topic is gold. You know, I know a lot of people, I've always heard when things go south in the economy, people go back to gold because it's more stable. Or I've I've heard that I've you know not personally invested in much gold myself, but so let's open up today's discussion with this topic. Is gold a still a smart investment for the average investor today?

Money Or Asset Class

SPEAKER_02 1:37

Uh well, um if you if you had owned it uh last year in 2025, your uh return on gold would have been 65%. So I'd say you'd have been pretty smart if you'd have done it uh and you sh look at it in a very, you know, kind of that short lens right there. Um, gold's a fascinating asset. Um, and I think often I would say more misunderstood than understood. You know, I think uh some say that you can kind of explain the history of the world through the history of gold, um, you know, because it's been around, you know, for arguably four to six thousand years. You know, gold's been and that is one of the things that makes it attractive and still it, you know, it's really the only current only type of currency, and we'll use that and we could talk about whether it's is it money or you know, is it money currency or is it an asset class? That'll be an interesting conversation to have as well. But think of the it's the um, but it in in in a sense, it's the only currency that has survived for thousands of years. Every other what we would call fiat currency or paper or coin type of currency. Uh every every government, every civilization has wiped out the value, has been has managed to wipe out the value of that, and gold has endured for thousands of years. So um, you know, there's a there's a beginning point with gold right there. So um an interesting asset. You know, some people um, you know, you asked the question, this I think this was asked of Ben Bernacke, former Fed chairman, um, I guess maybe three Fed chairman's ago, was the Fed chairman under the Bush administration, kind of saw the economy through. If you want to kind of date this through the 2008-2009 financial crisis, you can rate however you want to, but he was asked whether he thought that gold was money, and his response was no, it was not. Now, others would argue, you know, tremendously that it's not. But uh, you know, so different different schools of thought on gold. I I, you know, um, I think gold is we certainly, I guess we treat it more of an asset class, you know, from an investment perspective and using it, you know, in our firm. Um, but I'm I may have some I have but I have additional thoughts on it as well. So let me let me kind of leave those few threads of thoughts right there. You know, gold last year as an as an asset and investment was up 65%, which is tremendous. That kind of will we'll touch upon your uh you know, questions, why was it was it up that much? That's a you know, I think that's an interesting conversation to have. Uh, and there, you know, I I don't I can't tell you that I know exactly the answer to that, other than to say, as always my dad used to say, as I like to refer to my dad a lot during these things because he was a man with a lot of wisdom, was that just means there was a lot more buyers of gold than there were sellers of it. So um, and that's you know, and that's true in this when the stock market's up on any given day, more buyers than there are sellers, right?

Why Prices Jumped And Risk

SPEAKER_01 4:41

So right. Well that very, very true. Very true. Yeah, we're buyers and sellers. Yeah. Well, is it is it risky? I mean, uh what risk should the average investor be aware of before thinking about gold?

Fiat Currencies Versus Gold’s Longevity

SPEAKER_02 4:56

Well, well, is it risky? Well, I mean, I don't think you can have an asset that appreciates in value from one year to the next, 65%, and not assume that it doesn't have risk in it, right? I mean, a a an asset without risk uh is you know, is a is a CD or a savings count or buying a U.S. treasury, let's say. And that and so the risk-free return in the world today will say is around 4%. So, you know, gobles up 65% last year. So is that a risky asset to um, yeah, because that means it can go down, you know, 65%. So uh so, you know, but I but I don't that's one way to look at risk. The other thing is is that it's also been around, as I just said earlier, it's been around for you know 4,000 plus years, right? And it has endured all the way through that, and it has been accepted as a store of value or currency or an asset class to own. And I can assure you that there are thousands, I think, and I don't know if this is right because I'm maybe a little bit dated, but there are somewhere probably of all the gold in the world right now, there's probably somewhere it's it's more than 200,000 tons of gold that is out there. I think I'm right on that. No, you know, plus that. That's I know I may be a little bit, you know, behind on the on the weightage. Um, you know, we find about maybe three tons of it a year or something like that is mine. So it's pretty, you know, it's a tough mining process that goes through it. So I say all that to say, you know, I don't think it's it's not gonna go gold's not gonna go to zero, right? But if you buy it today and it's at$4,500 an ounce or something like that, and it's up 65% on a year over year basis, or you know, last 12 months, um, you know, is it gonna go to 5,000 or$5,500 over the next 12 months, or is it gonna go to$4,000 or$4,500? So if you bought gold at the price it is today and it goes down, you're gonna think risky asset, right? But again, it's not gonna go away. It is a it truly is a store of value. It is the only, again, it is the only, the only currency, and I think we can still call it currency to a degree, uh, that has been around since the beginning of man, right? For thousands of years. Every other paper currency, from you know, from the Roman coins to every other, you know, with the fiat currencies. And you know, the dollar is enduring right now, but is it and some of the reason why gold is at$4,500 an ounce right now and it went up 65% um, you know, last year is because, you know, not as only is the U.S. government buy it, but wealthy people are buying it. Why? Because and they store it offshore. They don't generally store their gold in the United States, the wealthy of the United States, they store it probably in the underground Swiss vaults where there are unbelievable places where these things take place. And it's quite a fascinating, you know, asset class and how it's we dig it out of the ground and then we kind of put it back into the ground once we get it out of the ground and uh and that's really it's kind of interesting to to in thinking about that, those things. But the reason why that's done is because it is the you know, the the fear of you know, we you talked about economic crisis, I think is one of the words we used as we began this, but it's the you know, is the dollar gonna lose its value? Is it gonna continue to be the fiat, you know, the accepted currency? It is the reserve currency of the world, right? The US dollar is. And so, you know, there's a lot of, and I think it'll remain that way for for a long, long time. There's way too much tied to it, in my opinion, uh, for that to change soon. But uh it's also probably inevitable at some point in time in the future, probably not during my lifetime, uh, maybe not during yours and Matt's maybe, uh, that the dollar collapses, that the currency collapses. And so we'll start all over and we'll get back onto a gold standard type of thing. So I mean, there's a lot of there's a lot of people that believe that, and it certainly is it's certainly feasible.

SPEAKER_01 9:05

Well, the the the dollar used to be the the the gold standard. There was, you know, all this gold from what I understand in Fort Knox that was, you know, backing up the the dollar, right? But that's not the case.

Nixon Ends The Gold Standard

SPEAKER_02 9:15

One to one. Yeah, it was a one-to-one ratio. 35, you could, you know, dollars, uh, it set the price of gold at 34 or 30 or 35 dollars an ounce. And then uh, you know, it was a very, and again, I won't go through the weeds of that, but it also basically what it it took care of trade deficits, you know, plus or minus on trade deficits. You had to swap out and and and and and kind of ameliorate that if immediately, you know, amongst amongst global trade uh with the gold standard. Um you couldn't essentially you couldn't really borrow more than, you know, you couldn't spit the government couldn't spend more than uh, with very few exceptions, than what it had in gold reserve currency. So the money, the money supply, you know, the dollars were tied to how much gold the United States or whatever other country, you know, what it had in reserve, right? And in 1970, August of 1971, under Richard Nixon, uh and uh Carl Volcker and three others, Carl Volcker was the assistant uh Ped Chairman, uh, won't tell you who who the others were, but uh politicians at Federal Reserve and banking experts five went to Camp David and uh in August of 1971, and what was thought to be a temporary suspension of the gold standard. That's what many of them would have told you as they came out of that meeting. Um, we eliminated the gold standard and just went on, you know, fiat comes, right? Just paper and trust of money, and have been able to print money ever since. You know, and so the the idea even coming out of that, uh, out of that was is that what was going to happen to the price of gold when that happened? What was gonna happen to the US dollar, and were treasuries gonna be still, you know, bought by by investors that were out there if we went off of the gold standard and then we did it. And what happened was there was a really very apathetic response from the public about moving off the gold standard. Again, we can talk about it's a different conversation, but there wasn't much blowback from the you know from the general public. Gold went from, because it had a set price of redeemable to the dollar at$35 an ounce, it quickly went to$850. Uh, so gold was was coveted even more. And politicians, the political class, found an incredible way to go into deficit spending and fund programs indefinitely uh from 1971 going forward to the tune where we are now with what$37 trillion worth of debt that would have never been possible if you were still on a gold standard. And also makes it impossible or not feasible to go back on a gold standard right now, you would argue, right? Because there's there's not enough, there's not enough gold in the world uh price-wise to support that kind of, you know, to support the the currency that's out there, right? The fiat currency that's out there. So, you know, it was really quite a um it was quite a day, you know, August of 1971 when they did that. I mean, it changed the course of uh of where of where we are today. Now you can argue with good, bad, or indifferent. Uh, you know, I don't know. So, you know, it put a lot more, it allowed the government to borrow money at at incredible amounts. It also allowed the Federal Reserve, right, to print money, to create money out of thin air. You just put zeros on, you just add zeros to to numbers and uh without any any backing other than what we say, what do we say now? The full faith and credit of the U.S. government. And that's how the world operates. And$37 trillion worth of debt, and you know, you can you can pull that you can pull that thread back and talk and talk for hours.

Debt, Money Printing, And Limits

SPEAKER_01 13:10

Summing up, for the average everyday investor, you know, somebody like me, does gold fit into a diversified portfolio strategy that you would recommend?

Portfolio Role And Position Size

SPEAKER_02 13:21

Yes, I I think it does. Um, you know, how how much is is the question. I mean, and it's and it's generally a fairly, you know, for for most people, it's a fairly small, a small sliver, right? I mean you know, like I said, I mean, when you you think about um we've talked a little bit about Bitcoin and Bitcoin being kind of digital gold and those kind of things, but I think there's a compliment there because there's scarcity of it. Gold has scarcity, you know, it's hard to, it's a difficult thing to mine. I talked about how much there was out there and how much can kind of be discovered on, you know, on any given uh in any given year, you know, through the mining process. But, you know, so I think it definitely does, does play a role, you know, and I think that role is somewhere, you know, in a two and a half, you know, percent kind of thing, something like that. A lot of people kind of overweight it. I think what you will find is that, but there are a lot of of very, you know, of of the wealthy house, you know, of the wealthy households, the, you know, the the legacy, the generational wealth of folks that are out there that you can think of some of the names of of people in the United States and around the globe, they have a lot more gold than that. Like they are, you know, they've gold has been being accumulated like, you know, crazy. I mean, that's how the price has been driven up. I mean, you know, the um, you know, countries have been, you know, stockpiling it, the U.S. included, has been stockpiling it uh, you know, over the last little bit. And I think that that has to do with the fear of there's a lot of global instability. Can the dollar remain, you know, can the U.S. remain the the uh the economic superpower? You know, again, there was a bit of a an attempt to create uh an alternative currency, you know, through the BRIC nations. Well, I won't go and name all those kind of things. It's really a very interesting subject to kind of look at gold. We've all heard the you know term getting fleeced, right? You know, which is kind of getting taken advantage of, you know, somebody kind of robbing your blind, you know, fleecing somebody. And that actually comes from the mining of gold going back to ancient times when uh, you know, you when people would you would see, you know, people would pan, you know, you think about panhandling, you know, in the and this is not where it started, you know, out when you'd see the uh you know the gold rush out in California, right? The San Francisco gold rush, you, you know, in the early parts of this country or in this country. But going back to ancient times, when they would sift through through the water and and gold would come through water. And so they would use sheep and the to run the water over top of and it would filter out the silt and the and everything, and the water would go over top of them because gold has is a pretty, you know, it's has heft, it's it's weighted, has pretty good weight to it, and it would get trapped. The gold flecks and the nuggets would get trapped in the sheep's wool, and that was called, you know, fleece fleecing the gold. And that's where the term you know getting fleeced came from.

SPEAKER_01 16:11

So did not know that. Well, that definitely no pun intended, undug it.

SPEAKER_02 16:18

So there you go. There's there's a you know, at the very least, you can take that with you from the gold conversation today. That's where the getting fleeced or fleecing somewhere. That's where that's where the expression comes from from ancient from ancient mining techniques uh of gold, using sheep. Fleecing.

SPEAKER_01 16:37

Very good to know. And again, good to know that it's an option for folks like me uh as an investment. So not necessarily fleecing.

SPEAKER_02 16:44

I thought we're using sheep to mine for gold.

SPEAKER_01 16:46

Oh no. Well, I that too. Jeff, thank you so much for breaking this down, uh, but breaking down the pros and cons of gold for today's average investor. We appreciate it.

SPEAKER_02 16:56

You're very welcome, Skip. It was my pleasure.

SPEAKER_00 17:02

Thanks for tuning in to the Four Seasons Podcast, brought to you by BH Wealth Strategies, where your financial success is our priority. Schedule your free 20-minute consultation today by calling 423-247-1152 or by visiting bhretire.com. Take the first step toward making your financial dreams come true. Until next time, remember every season is the right season to plan for your future. Securities and Registered Investment Advisory Services offered through Silver Oak Securities, Inc. member FENRA SIPC. Wealth Strategies and Silver Oak Securities Inc. are not affiliate.