In recent years, perceptions of gold and silver have shifted dramatically, evolving from “boring” assets associated with a bygone era to enticing opportunities for today’s first-time investors. This change can be traced back to a remarkable surge in gold prices, which have skyrocketed from around US$2,000 to over US$5,000 per ounce since 2024. This unprecedented rally has sparked an influx of new investors eager to enter the precious metals market.
To shed light on these significant trends, Chin Hui Leong, co-founder of a prominent investment firm, recently appeared on Channel News Asia (CNA), where he offered insights into the sustainability of the ongoing “gold rush.” He draws a critical distinction between investing in gold and stocks, emphasizing that purchasing gold is more akin to participating in a speculative pricing game rather than investing in a productive asset. Unlike stocks, which can generate returns through company profits and innovations, gold’s value is contingent upon what someone else is willing to pay. As such, gold prices can experience sudden declines without any fundamental reason, highlighting its lack of a stability-based “valuation floor.”
The stark contrast in returns is evident when examining historical data. Over the long term, gold has delivered an average real return of about 0.64% annually, significantly lagging behind equities, particularly in the U.S. stock market, which has achieved approximately 6.9% annual real returns. Though gold has enjoyed a recent period of outperformance, Chin cautions that potential investors must maintain realistic expectations, with a firm view that, for long-term wealth building, the stock market remains the more reliable option.
During the interview, Chin explored the differing motivations of younger and older investors. While younger individuals are generally seen as more risk-tolerant, he provides a nuanced perspective that highlights their focus on wealth accumulation. They tend to be more open to exploring high-volatility assets in pursuit of building their financial futures. In contrast, older investors, especially after significant market rallies over recent years, often prioritize capital preservation. For this demographic, traditionally stable investments—such as bonds or dividend-paying blue-chip stocks—are appealing as they seek to safeguard their accumulated wealth.
Chin underscores that investment vehicles should be aligned with one’s objectives, which naturally evolve over time. Notably, while some are diverting their attention to gold, many seasoned investors are returning to the local Singapore market. In recent months, this market has seen a broader rally that extends beyond the well-known “Big Three” banks to include sectors such as telecommunications and industrials. The government’s Equity Market Development Programme (EQDP) has played a critical role in this momentum by increasing its budget from S$5 billion to S$6.5 billion in 2026, thereby highlighting the potential of high-quality, lesser-known local companies and maintaining a robust marketplace.
Chin’s message is clear: the key to successful investing lies not in pinpointing the next lavish asset but in understanding one’s financial goals. He stresses that time in the market is more crucial than timing the market itself. A reference to DBS Research showcases that an investor who held onto shares in the Straits Times Index (SGX: ^STI) from 2000 to 2011 could have realized rolling returns between 6% and 13.3% over a 15-year span without speculative guessing.
As uncertainties loom over the market, investors are encouraged to seek reliable options for their funds. A complimentary report reveals five Singaporean dividend-payers designed to withstand global financial challenges, promoting informed decision-making in turbulent times.
