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Gold vs Stocks: Which Investment Is More Profitable in the Long Run?

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Gold vs Stocks: Which Investment Is More Profitable in the Long Run?

Gold vs Stock Investment Comparison

Which performs better in the long run — gold or stocks? Let's break down the myths, math, and facts to see where your money might grow faster.

Gold and stocks are two of the most discussed investment vehicles. Gold is timeless, often recommended by parents and grandparents as a safe haven. Stocks? They’re often labeled as risky and unpredictable. But what if the truth is far more nuanced?

Why Gold Has Always Been a Favorite

The Traditional Choice

For generations, gold has been the go-to investment. Easy to buy, tangible, and simple to liquidate when needed. In Indonesia, for example, the price of gold has risen from IDR 572,000/gram in 2012 to IDR 975,000/gram by August 2022—a solid 70.45% increase in a decade.

Gold's Strengths

  • Easy to purchase online or at physical shops
  • Tangible asset that you can store yourself
  • Acts as a hedge against inflation
  • Highly liquid and stable in value

The Case for Stock Investment

Higher Risk, Higher Reward

Stocks can be volatile in the short term. Even blue-chip stocks like Bank BCA experience ups and downs. But over the long term? They can outperform gold by a significant margin.

Case Study: Bank BCA Stock

If you had invested IDR 13 million in Bank BCA shares in 2012, you’d have purchased about 7,500 shares at IDR 1,160 each. Fast forward 10 years — those shares are now worth IDR 8,000 each, turning your investment into IDR 60 million. That’s a return of over 390% or IDR 47.9 million in pure capital gain.

Plus Dividends!

Between 2012–2022, Bank BCA consistently distributed dividends. Just from dividends, those same 7,500 shares earned over IDR 4.4 million. This turns stocks into productive assets, unlike gold, which doesn’t grow or generate income.

Gold vs. Stocks: Long-Term Profit Comparison

Asset 2012 Investment 2022 Value Profit
Gold (22.7g) IDR 13,000,000 IDR 22,130,000 +IDR 9,100,000
Bank BCA Stock IDR 13,000,000 IDR 60,000,000 +IDR 47,900,000 (+IDR 4.4M dividend)

Important Considerations

  • Gold is best as a value protector against inflation, not for generating wealth.
  • Stocks are more suitable for long-term investors willing to endure short-term fluctuations.
  • Choose fundamentally strong companies with consistent earnings like Bank BCA.

Quote to Remember

"Gold is a store of value. Stocks are engines of wealth."

Conclusion

So, which is better: gold or stocks? Both are profitable long-term. But if your goal is to maximize growth and income, high-quality stocks outperform gold by a wide margin. Just remember: the biggest loss comes from doing nothing and letting your money depreciate in cash.

What’s your investment strategy? Share your thoughts in the comments and follow our blog for more investment insights!

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