I think you make a couple mistakes in your analysis. You seem to consider the investment with the higher yield the better investment. What about people who consider investments that have less risk of loss better investments.

Actually balancing risk against reward and a personal risk tolerance might be a more meaningful approach.

Where should people put their money when they are moving to a risk off position.

What about concerns of a liquidity crisis like in Lebanon or happened in Greece where you were limited in the amount of cash you can withdraw from your accounts. Gold might not be a good long term investment but if I was being prevented from withdrawing cash, having some gold in a vault might help me sleep at night.

Maybe Gold does not belong in your investment portfolio but it does belong in your asset portfolio. If you think of all your assets as investments and value them based only on long term return you are missing half of the equation.

A paid off house and a bag of gold and you could weather some serious catastrophes. In a catastrophe, money in an S&P 500 ETF might not even be accessible an it might have lost more than half its value overnight.

Diversify means more than investing in different things, it also means investing in different assets held in different ways. If you Gold is in a fund with the same broker as your other ETF’s you have not diversified enough.

TEK