After the Gold Rush

Gold at record highs. Silver back in the headlines. Should you have owned more?

If you’re building up your investments or even approaching retirement, you have probably noticed the noise.

Gold and silver have had a strong run. Prices have hit record levels. Financial media coverage has been relentless.

It is natural to ask:

Have I missed out? Should I own more gold now?

Before making any changes, it is worth stepping back.

Because what feels obvious today rarely was at the start.

The Hindsight Trap

When an asset performs well, our brains rewrite history.

Psychologists call this hindsight bias. Once something has happened, it feels predictable. I knew that would happen.

But go back 18 to 24 months...

• Interest rates were high.

• Inflation was volatile.

• Gold had moved sideways for years.

• Silver had disappointed more than it had delivered.

There was no clear signal that a major rally was inevitable.

To capture outsized gains, you would have needed to make a large, concentrated allocation before the move began.

That is not diversification. That is a bet.

And for every successful bet you read about, dozens quietly fail. That is survivorship bias. The winners make headlines. The losers disappear.

For high earners and business owners building long term wealth, relying on concentrated bets is not a strategy. It is speculation.

Commodities vs Companies

There is a simple but important distinction here:

Gold and silver do not produce income.

They do not generate profits.They do not reinvest in growth.They do not innovate.

They sit there.

In contrast, equities represent ownership in real businesses. Companies that:

• Serve customers

• Adapt to change

• Develop new products

• Generate earnings and cashflow

Over time, it is earnings and reinvestment that drive returns.

As a Chartered Financial Planner working with business owners and professionals, I often frame it this way:

If you understand how hard it is to build a profitable business, you understand why owning productive assets matters.

Gold can act as a store of value at times. It can provide diversification benefits in certain environments. But its long-term return relies largely on what someone else is willing to pay for it in the future.

Businesses, by contrast, create value internally.

The Role of Gold in a Global Portfolio

If you already hold a diversified global portfolio, you probably did not “miss” the rally entirely.

Many global equity funds include:

• Mining companies

• Commodity producers

• Firms linked to precious metals supply chains

You captured some of that upside, just not through a single, concentrated position.

And that is deliberate.

For the type of clients we work with, typically:

• Business owners extracting wealth from their companies

• Professionals with complex remuneration such as bonuses and RSUs

• Individuals within 10 years of retirement asking, “Am I going to be OK?”

The objective is not to win the performance table every single year.

The objective is to build durable, evidence-based portfolios that support:

• Financial independence

• Tax efficiency

• Controlled risk

• Intergenerational wealth

That requires discipline. That requires an understanding that meaningful wealth is built over time. A single year tells you very little. Five years, ten years, across different market conditions, that is where a strategy proves itself.

One Year vs Nearly Four Decades

If we look at the most recent 12 months, gold has delivered an exceptional return of 58.48% in GBP terms.

Chart 1 - Comparison of equity markets, Gold, RPI and GBP over last 12 months demonstrating the difference in short term returns. Figures provided by Dimensional Fund Advisors. While every effort is made to be accurate, they cannot be guaranteed. Past performance does not predict future returns.

Over the same period, the MSCI All Country World Index returned 10.91%.

On a one year view, gold looks dominant.

But now widen the lens.

Looking back to 1988 through to January 2026:

• Gold annualised return since 1988: 7.16%

• MSCI All Country World Index annualised return since 1988: 9.70%

• UK Retail Price Index over the same period: 3.66%

Chart 2 - Comparison of equity markets, Gold, RPI and GBP between 1988 and January 2026 demonstrating the difference in long term returns. Figures provided by Dimensional Fund Advisors. While every effort is made to be accurate, they cannot be guaranteed. Past performance does not predict future returns.

Over almost four decades, global equities have delivered materially higher compounded returns than gold.

That is the difference between performance and compounding.

A single year can be dramatic. Forty years tells you what actually builds wealth.

If you had invested £100 in 1988 and left it untouched, the growth of global equities versus gold over that period would not look similar. It would look structurally different.

This is why the timeframe you choose changes the conclusion.

When the media shows one-year returns, gold looks obvious. When you look at full market cycles, productive businesses tell a different story.

For business owners and high earners, this matters.

You would never judge your company on one exceptional year. You would look at long term profitability, resilience and consistency. Your portfolio deserves the same discipline.

Process Over Headlines

There will always be a “hot” asset class...

·       Tech stocks.

·       Property.

·       Crypto.

·       Now gold.

The story changes. The emotion is the same.

The real risk for affluent families is not missing the next rally.

It is:

• Taking excessive risk late in the cycle

• Abandoning a well-structured plan

• Allowing emotion to override process

A robust financial plan is built around:

1. Clear cashflow modelling

2. Sensible tax structuring

3. Evidence based investing

4. Broad diversification

5. A time horizon measured in decades, not quarters

That is how you protect and grow meaningful wealth.

A Practical Question

If you are feeling uncomfortable watching gold rise, ask yourself:

• Has my long-term objective changed?

• Has my required rate of return changed?

• Has my tolerance for volatility genuinely changed?

Or is this simply the discomfort of watching something else run?

There is nothing wrong with holding a modest allocation to commodities as part of a structured strategy.

But making reactive shifts based on recent performance is rarely how serious wealth is built.

The Bigger Picture

Gold has been around for thousands of years. It will likely remain part of the financial landscape.

But so will:

• Global businesses

• Innovation

• Productivity growth

• Human ingenuity

Owning a diversified portfolio means owning that progress.

For high-net-worth individuals and business owners, the question is not:

“What is the best performing asset this year?”

It is:

“Does my portfolio give me a high probability of achieving the life I want?”

If you would like to sense check your current allocation, or pressure test how your portfolio would behave across different scenarios, we can do that.

Have you considered whether your current structure is built for headlines, or built for the next 20 years?

Important Information

The performance data referenced above is based on historical returns from January 1988 to 31 January 2026, converted to GBP using NY close rates

Past performance does not predict future returns.

• Gold Spot Price Represents the market price of physical gold. It is a commodity and does not generate income. Returns are based solely on changes in the market price of gold.

  
  

• MSCI All Country World Index (gross dividends) A global equity index that tracks large and mid-capitalisation companies across developed and emerging markets. Gross dividends means dividends are included in the return calculation before withholding taxes.

  
  

• British Pound (GBP, MSCI) Reflects the movement of sterling as a currency. It represents currency performance rather than an investable asset or income-producing investment.

  
  

• UK Retail Price Index (RPI) An official measure of UK inflation. It tracks changes in the cost of a basket of goods and services and is not an investment index.

  
  

The value of investments and the income from them can fall as well as rise. You may get back less than you invest.

Returns shown are index data provided by Dimensional Fund Advisors and do not include the impact of advice fees, platform charges or personal taxation, which would reduce investor returns. The while every effort has been made to be accurate, the figures are not guaranteed.

Gold and equity markets can be volatile. Short term returns can vary significantly from long term averages. Currency movements may also impact returns.

This content is for information only and does not constitute personalised investment advice.