Ancient Rome: an ounce of gold could buy a high-quality toga.
Today: an ounce of gold can still buy a high-quality suit.
The same is true of other real assets like quality horses or cattle. Gold has done something remarkable over thousands of years—it has largely preserved its purchasing power.
The Spanish real was once the world's dominant currency. Then came the Dutch guilder. Then the British pound. Today, it's the U.S. dollar. Through every one of those transitions, gold remained universally recognized as valuable.
Does that mean gold is the best investment? Not necessarily.
Every reserve currency in history has eventually been replaced. But whatever nation rises next will almost certainly have businesses that innovate, hire employees, generate profits, and produce cash flow. They'll simply do it in whatever currency the world uses.
Twenty years from now, I could be investing in the IPO of a trillion-dollar AI company headquartered somewhere no one expects, using a digital currency that doesn't even exist today.
Or maybe not. I can't predict the future. Neither can anyone else. Fortunately, successful investing doesn't require predicting the next reserve currency.
It requires owning productive assets that can adapt alongside the global economy.
Gold is scarce. It's durable. It's an excellent store of value. But it doesn't build products. It doesn't hire employees. It doesn't earn profits. It doesn't pay dividends. Businesses do.
If you could have owned diversified baskets of the world's largest and most productive companies throughout history—even dating back to Ancient Rome—you would likely be many multiples wealthier than if you have simple held gold.
Gold has been exceptional at preserving wealth. Businesses have been exceptional at creating it.