Investors can\u2019t help but notice\u00a0the sparkle of gold\u2019s record run. But they may want to think twice before adding more of it to their portfolios<\/a> \u2014 over the long haul, it underperforms<\/a> compared to stocks and other assets.<\/p>\n \u201cGold glitters but earnings compound,\u201d said Pat Beaird, a certified public accountant and co-founder of Beaird Harris Wealth Management in Dallas.<\/p>\n \u201cOver 30 years, compounding wins every time,\u201d he said. Beaird Harris Wealth Management\u00a0is ranked No. 3 on CNBC\u2019s\u00a0Financial Advisor 100 list<\/a> for 2025.<\/p>\n<\/div>\n Here\u2019s a look at more coverage of CNBC\u2019s Financial Advisor 100 list of top financial advisory firms for 2025:<\/em><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n Gold is on a hot streak<\/a>.<\/p>\n Spot gold<\/a>\u00a0is now over $4,000 per ounce for the first time. It\u2019s also up 51.6% year-to-date, as of Tuesday\u2019s close \u2014 and there may be more room to run amid the government shutdown, expectations of interest rate cuts and further geopolitical uncertainty<\/a>, experts say.<\/p>\n Goldman Sachs analysts forecast prices could hit $4,900 an ounce by the end of 2026, according to a research note published Monday.<\/p>\n Still, over a 30-year period through September, the annualized total return for gold is 7.96%, per Morningstar Direct data. Over the same time frame, the total return of S&P 500 stocks is 10.67%, and for real estate, 8.89%.<\/p>\n<\/div>\n \u201cHistorically, our view has always been that equities have more staying power as an inflation hedge,\u201d Beaird said. While gold can \u201cpop\u201d during periods of turmoil and huge deficit spending, \u201cit\u2019s not reliable,\u201d he added.<\/p>\n \u201cIf I\u2019m going to subject a portfolio to that level of volatility, I\u2019d rather have it in the highest returning asset class.\u201d<\/p>\n<\/div>\n Mark Mirsberger,\u00a0a CPA and\u00a0CEO\u00a0of Dana Investment Advisors, which ranked No. 6 on CNBC\u2019s Financial Advisor 100 list for 2025, also said other investments are more appealing than metals, even now. \u00a0<\/p>\n \u201cWe still see diversified balanced portfolios utilizing bonds and asset classes other than gold as more attractive and flexible than using material gold positions,\u201d Mirsberger said.<\/p>\n \u201cEquities have historically been a good hedge against inflation, and they generate earnings growth and pay dividends, something gold doesn\u2019t do,\u201d he said.<\/p>\n<\/div>\n Gold\u00a0surged past the $3,900-an-ounce level for the first time on Monday, driven by safe-haven demand following a fall in the yen and a U.S. government shutdown, while growing expectations of additional Federal Reserve rate cuts also lent support.<\/p>\n Bloomberg | Bloomberg | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n Yet, at an economic forum on Tuesday, Bridgewater Associates founder Ray Dalio said investors should allocate as much as 15% of their portfolios<\/a> to gold. He compared today\u2019s environment to the 1970s,\u00a0when the precious metal jumped by 100% amid geopolitical unrest, inflation, significant government spending and high debt.<\/p>\n \u201cIt is one asset that does very well when the typical parts of the portfolio go down,\u201d Dalio said.<\/p>\n<\/div>\n Investors regard gold as protective against \u201cbad economic times,\u201d according to\u00a0research\u00a0<\/a>by the Federal Reserve Bank of Chicago.<\/p>\n As a safe-haven investment, gold tends to perform well in low-interest-rate environments and during periods of\u00a0political and financial uncertainty<\/a>, according to Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute.\u00a0<\/p>\n With the U.S. government shutdown now in its second week and gold prices hitting new highs, \u201cthe trend is very much intact,\u201d he said.<\/p>\n<\/div>\n Experts often recommend getting\u00a0investment exposure to gold<\/a>\u00a0through an exchange-traded fund that tracks the price of physical gold, as part of a well-diversified portfolio, rather than buying actual gold coins or bars. \u201cThat makes the most sense for the vast majority of investors,\u201d Samana said.<\/p>\n But despite the metal\u2019s historic run, financial advisors\u00a0generally recommend limiting<\/a>\u00a0gold exposure to a low single-digit percentage of any portfolio.<\/p>\n \u201cIt\u2019s always had a position in a lot of our portfolios, but not necessarily a big one,\u201d said John Mullen, president and CEO of Parsons Capital Management, which ranked No. 1 on\u00a0CNBC\u2019s list of the top 100 financial advisors<\/a>. Mullen is also a member of CNBC\u2019s Financial Advisor Council<\/a>.<\/p>\n However, Mullen said gold is looking increasingly attractive and his firm\u2019s outlook is positive: \u201cWe do think that gold can continue to move higher.\u201d<\/p>\n<\/div>\n Mullen said his position is not in line with Dalio\u2019s recommendation of 15%, but factoring in \u201cthe fiscal mess that is Washington and the uncertainty coming out of there, we\u2019ve become increasingly constructive,\u201d he said.<\/p>\n Largely through investments in gold bullion-backed ETFs and gold miner stocks, \u201cwe\u2019ve probably added a couple of percentage points, but still in the single digits,\u201d he said.<\/p>\n Although Beaird said his firm maintains a strategic allocation \u2014 of up to 10% \u2014 in various alternative investments<\/a> in the portfolios they manage for clients, \u201cgold is just not one of them.\u201d<\/p>\n Subscribe to CNBC on YouTube.<\/strong><\/em><\/a><\/p>\n<\/div>\n<\/div>\n\nMore from CNBC\u2019s Financial Advisor 100:<\/h2>\n
Gold returns are \u2018not reliable\u2019<\/h2>\n
Why gold shines in \u2018bad economic times\u2019<\/h2>\n
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How to invest in gold<\/h2>\n
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