Why People Hold Gold for Decades, and Three Things They Get Wrong

Gold is the one investment that almost every Malaysian household already owns, and it tends to sit in a drawer or a safe deposit box for ten years, twenty years, sometimes forty, without ever being sold. That is unusual enough to be worth understanding before looking at what people believe about it.

Why People Hold Gold for Decades

It Is the Asset Everyone Already Knows

Nobody has to teach you what gold is, because you grew up around it. Your mother owns some, your grandmother owned some before her, and the price comes up at family gatherings without anyone needing to look it up.

A unit trust or an ETF arrives very differently. It comes with a prospectus, a risk questionnaire, and a set of words you have to learn before you can make a single decision, whereas gold asks for none of that.

That head start is real and it matters, because it removes the thing that stops many people from investing at all. Being familiar with gold is not the same as understanding it, though, and you can know exactly what gold is while having no idea how it behaves. The first takes no effort at all, and the second takes work.

You Can Wear It

Gold does two jobs at once, which is close to unique among investments. It holds value while also being jewellery, a gift, and a way of marking an occasion, and nobody has ever worn a unit trust to a wedding or handed over shares as hantaran (the gifts exchanged at a Malay wedding).

That changes how gold enters a home, because it usually arrives as a present rather than as a purchase, and it changes how long gold stays, because selling it means losing the jewellery as well as the money. Selling gold is almost never a purely financial choice, which is a large part of why it so rarely happens.

It Has Been Money for a Very Long Time

Gold has been used as money for thousands of years across almost every civilisation, and no modern financial product comes close to that record. In Islamic tradition it appears as the dinar, and it is also the measure used for the zakat nisab, which is the level of wealth at which zakat becomes payable.

That history is real, and it explains why gold feels trustworthy in a way that a fund does not. It is worth being clear about what it does not explain, though. The fact that people have always accepted gold tells you nothing about what gold will be worth in twenty years, because being accepted as money and growing in value are two different things. Gold has earned the trust it has, and the investment case still has to be made with numbers.

Wahed Academy covers gold's enduring appeal and the different forms it can be held in in more detail.

Three Things People Get Wrong About Gold

Familiarity comes at a price. Because most people learn about gold through conversation rather than reading, beliefs about it get passed down without anyone ever checking them, and three of those beliefs come up again and again.

"Gold Only Goes Up"

This is the most common belief and the easiest one to test, because gold's price history is public, and it shows that gold falls often enough, and hard enough, to matter.

Period	What Happened
1980 to 2000	Gold lost roughly 69% of its value across two decades
2013	Gold fell about 28% in a single year
Past 26 years	Gold produced negative returns in 6 of them
Since January 2026	Gold set a record of about $5,589 an ounce, then fell roughly 28%

The stretch from 1980 to 2000 is the one worth sitting with, because twenty years is longer than most people spend investing in their entire lives, and anyone who bought gold at the start of it and held on to the end lost most of their money in real terms.

None of this means gold is a bad asset. It means gold is an asset, and assets fall. Believing gold is the exception is not a harmless mistake, because it is the belief that leads people to put more into gold than they should, on the assumption that there is no downside to plan for.

"Physical Gold Is Better Than Paper Gold"

The problem with this one is the word better. Physical gold and a gold ETF both track the same metal, so when gold rises 10% both rise by about 10%, which means better cannot refer to returns, because the returns are the same.

What does change is cost, and over a long holding period cost is the only real difference between the two. The ETF's costs are published, and the gold ETF that Wahed's gold portfolio invests in charges a management fee of 0.50% a year, a trustee fee of 0.06% and a licence fee of 0.0075%.

	Physical Gold	Gold ETF
Paid when you buy	Upah (the workmanship charge) on jewellery, or a premium above the market price on bars	Brokerage, or your platform's fee
Paid every year	Storage, whether that is a safe deposit box or the risk of keeping it at home, plus insurance if you want it	Management fee 0.50%, trustee fee 0.06%, licence fee 0.0075%
Paid when you sell	The spread, which is the gap between what a kedai emas (gold shop) sells at and what it pays to buy back	Brokerage, or your platform's fee

Most people who prefer physical gold are not really arguing about cost, though. They are worried that paper gold is not real gold, and that a certificate might not be backed by anything, which is a fair thing to want checked. What the checking shows is that at least 95% of the fund's money is held as real gold bars, bought only from refiners approved by the London Bullion Market Association, and stored in a secured vault in Singapore in the fund's own name, with a Shariah Adviser auditing it once a year and visiting the vault to confirm the gold is actually there.

Physical gold still has advantages, but none of them are about returns. There is no middleman who can fail, you can wear it, and you can give it away at a wedding. Some people also believe on religious grounds that gold should be physically held, and that is a matter of conviction which no cost table can settle.

Put simply, physical gold is better at being gold while paper gold is cheaper at being an investment, and which one suits you depends on what you wanted it for in the first place.

"Gold Beats the Stock Market"

This one is different from the other two, because sometimes it is true. Since 2000 gold has beaten shares comfortably, and that is not a trick of the numbers, because someone who bought gold in 2000 and left it alone for twenty-six years ended up ahead of someone who bought shares and did the same.

Now change one thing, which is the year you start counting. Start in 1980 and gold loses badly, start in 2011 when gold was at its previous peak and gold loses again because shares rose strongly over the decade that followed, and start in 2000 and gold wins. The two assets never changed and the arithmetic never changed, so the only thing producing three different answers was the starting year.

Same Two Assets, Same Math — Different Winner Depending Where You Start Counting

Illustrative, not to scale. Same two assets, same arithmetic — the only variable changing the answer is the year you start counting. See Sources for underlying gold price history.

That means "gold beats the stock market" is not really a fact about gold at all, but a fact about when you started counting, and almost nobody picks their starting year on purpose. You start when you have money, or when someone gives you something, or when a headline catches your eye.

A statement that flips depending on when you measure it is not a good reason to buy anything or to avoid anything. It is a sign that the question itself is the wrong one.

Where Gold Actually Belongs

None of this is an argument against gold, which does something that shares cannot, although that something is not producing higher returns. Gold tends to move independently of the stock market, so when shares fall gold often holds up and sometimes rises, and this is what people mean when they call it low correlation.

That matters for a straightforward reason. If everything you own moves in the same direction at the same time, your savings swing hard, whereas holdings that move differently produce smaller swings, and smaller swings are easier to live with. People who can live with their portfolio tend to stay invested, and staying invested is where most long-term returns come from.

So the useful question was never whether gold beats shares, but how much gold to hold, what to hold alongside it, and for how long. Those questions have answers, and the answers depend on your own situation rather than on gold's reputation.

People hold gold for decades because it is familiar, because it can be worn, and because it carries a history that nothing else has, all of which are good reasons to own some gold. None of them was ever a reason to expect gold to only rise, to assume the physical form must be better, or to treat one good stretch of history as a permanent rule.