Gold vs Stock market equities
Side-by-side comparison, when-to-use-each guide, and instant conversion. Reviewed for 2026.
Inflation protection, portfolio diversification (5-10% gold allocation), geopolitical uncertainty hedge.
Long-term wealth growth, income (dividends), most of your portfolio most of the time.
| Aspect | Gold | Stock market equities |
|---|---|---|
| 30-year return (UK) | ~4-5% real per year | ~7-8% real per year |
| Dividend income | None | 3-5% (UK dividend yield typical) |
| Volatility | Lower than equities | Higher |
| Inflation hedge | Yes | Partially (depends on sector) |
| Recommended allocation | 5-10% of portfolio | Majority of long-term portfolio |
Frequently asked
Should I buy physical gold or gold ETFs?
ETFs (like iShares Physical Gold ETC) are simpler, more liquid, and storage is handled. Physical gold requires secure storage and insurance. For most investors: a gold ETF in a Stocks and Shares ISA is the efficient choice.
Why doesn't gold pay a dividend?
Gold is a commodity with no earnings — it doesn't produce anything. You can only profit from price appreciation. Warren Buffett's critique: 'If you take all the gold in the world, it would fill a cube about 67 feet per side. At current gold prices, you could buy all the farmland in the US and still have change.'