Will Gold Shine When Markets Are Dim?

Gold bullion can be seen after being removed from casts at the ABC Refinery smelter in Sydney on April 29, 2025. (Photo by DAVID GRAY / AFP) (Photo by DAVID GRAY/AFP via Getty Images)

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When markets decline, most investment portfolios find it challenging to safeguard their value – except, historically, gold. We examine the 10 worst months for the S&P 500 since 2015, and gold outperformed stocks every single time, frequently showing positive returns while stocks were deep in the negative. A simple adjustment – allocating merely 10% of a portfolio to gold – would have mitigated losses in each of these downturns, all while having a minimal effect on your long-term alpha. Related – Why Don’t Advisors Add 10% Gold to Client Accounts?

Markets can change rapidly, and March 2020 demonstrated this (see S&P crashes during past crises). In the S&P’s 10 worst months since 2015, gold consistently softened the impact.

• Gold was positive in 5 out of the 10 worst months for the SPDR S&P 500 exchange traded fund (SPY)
• Even when gold showed negative returns, it typically declined much less than SPY
• In severe crash months such as March 2020 (Covid-19 panic), gold experienced minimal change (-0.2%) while SPY dropped (-12.5%).
• If you allocated 10% of your equity to gold, the excess return would have consistently ranged between +0.6% and +1.5% compared to SPY. That type of buffer is very encouraging.

Wealth preservation is fundamental to our mission. Trefis collaborates with Empirical Asset Management – a wealth manager based in the Boston area – whose asset allocation strategies produced positive returns during the 2008-09 period when the S&P declined by over 40%. Empirical has integrated the Trefis HQ Portfolio within this asset allocation framework to offer clients improved returns with reduced risk compared to the benchmark index; resulting in a smoother investment experience, as shown in HQ Portfolio performance metrics.