Some assets let you sleep peacefully, no matter how violent the financial storm. Gold is one of them. For thousands of years—from Egyptian pharaohs, European kings, to modern billionaires—gold has been kept as a protective talisman. If you’re building a portfolio, here’s one golden (literally) rule:
👉 Always keep 5–10% of your net worth in gold.
Gold – From Ancient Money to Modern Safe Haven
Gold (symbol Au) is soft, shiny, and never rusts. But its true magic lies in humanity’s unshakable belief in its value.
Imagine this: 100 years ago in the U.S., 1 ounce of gold could buy you a fine tailored suit. Today, 1 ounce still buys a premium tailored suit (actually, several of them).
Paper money, on the other hand? $100 in 1920 bought you a cow. Today it might buy just a few kilos of beef.
Until 1975, many countries used the gold standard, where every banknote was backed by gold reserves. Even though that system ended, gold’s role as a safe haven asset has never changed.
Gold Around the World
Production: South Africa, China, the U.S., Australia, Russia lead the pack.
Consumption: Before 2013, India was the #1 gold addict (800 tons/year). Since then, China took over, consuming ~⅓ of global output. Vietnam even ranks in the top 20.
Usage: 50% jewelry, 40% investment, 10% industry. Fun fact: gold rarely disappears—it just moves from one hand to another.
Gold Prices – The Roller Coaster That Only Goes Up Long-Term
Gold’s behavior is peculiar:
In stable times, it moves slowly, almost boringly.
In crises—war, inflation, recession—it explodes upward.
Examples:
1990–2005: around $400/oz.
2005–2011: soared to ~$1,900/oz.
2011–2015: dropped back to $1,100/oz.
2015–2019: steady climb to $1,552/oz.
Lesson: Buy during the lows and hold long enough → returns are impressive.
Bought in 2000 at $300/oz → sold in 2019 at $1,500/oz → ~8.8% CAGR (even higher in VND due to FX).
Why Gold Is Worth Holding but Not Worth “Day-Trading”
Long-term gold = insurance against inflation and crises.
Short-term gold = casino with random, violent swings.
A real story: wealthy Vietnamese bankers once tried “trading gold accounts” internationally with huge leverage. Most lost everything—because short-term gold prices are erratic and designed to shake out weak hands.
👉 Survival rule: Hold gold long-term for wealth protection. Don’t treat it like a lottery ticket.
Government’s Perspective
Gold is great for individuals, but less helpful for national economies:
Importing gold drains foreign reserves.
When people hoard gold in safes, money doesn’t flow into production or business.
Vietnam alone is estimated to be “storing” ~500 tons of gold.
Attempts to mobilize it face three issues:
Trust: people only deposit gold if trust is absolute.
Price risk: mobilize then gold spikes = massive losses.
Speculation: mobilization itself can spark gold speculation.
Pro Investor’s Advice
✅ Do: Hold 5–10% of your portfolio in physical gold or gold ETFs.
❌ Don’t: Use leverage or short-term speculation unless you’re highly experienced.
Remember: gold won’t grow like stocks, but it ensures you won’t be wiped out in crises.
Conclusion
Gold won’t make you rich overnight, but it fortifies your wealth.
It’s like a life jacket—you might not use it every day, but when the storm comes, it’s priceless.
👉 Gold is the true “lucky charm” in the pocket of every smart investor.
