I Don't Hate Gold. I Just Don't Love It.

I can't find any similar era where U.S. equities did this badly during a four-decade period. In terms of equities, Japan is probably the closest thing we can point to as a long-term loser, from 1989 to present. But that is the exception that proves the rule; it helps explain exactly why having a broadly diversified portfolio of different asset classes is so important for investors.

Gold, on the other hand, has had run-ups, only to be thrashed in repeated and huge selloffs. This has happened in 1915-20, 1941, 1947, 1951-66, 1974-76 1981, 1983-85, 1987-2000 and since 2011. That doesn't encourage one to use it for investment purposes.

The circumstances that caused gold to do well were present during the 2000s: The U.S dollar was weakening, stocks were in a bear market and central banks limited their sales of the precious metal. There was also the expectation, ill-founded as it turned out, that central bankers would recklessly run the printing presses to combat the Great Recession caused by the financial crisis and touch off hyperinflation. I was positive on gold back then, and had suggested investors consider the SPDR Gold Shares ETF.

But today, that moment has come and gone: The financial crisis is a thing of the past, the dollar has surged to a 13-year high and inflation is nowhere to be found. No wonder gold has lost a third of its value since reaching a record high in September 2011. 

Perhaps my biggest beef with gold is that it is a bet against human ingenuity. As the Malthusians discovered to their dismay, the world didn't run out of food as population grew — humans simply became much cleverer, productive and efficient at producing it. I have similar hopes that human brain power will solve issues such as global warming, cancer, heart disease and intolerance, while also avoiding the dire events that gold bugs tout as a reason to buy the metal.

So you see, I really don't hate gold. I don't love it, however. There have been times when it can make you some money. But as an investment, it has been a long-term money loser.