Honest question: Why is gold considered a good investment? [View all]

[Nuclear Unicorn]

No snark from me; I honestly don't know why.

I was listening to the radio when an ad for some concern that buys gold came on. The ad claimed they pay the highest rate for your gold which is apparently 80% of market value by weight. I will admit I do not know if this claim is true: 80% being the highest payment offered but assuming it is this seems a horrible investment.

If I buy $1,000 in common stock I have made a good investment if my return outpaces inflation by a mere percentage point or two. In other words, I'm looking to see forty inflation-adjusted dollars per $1,000.00 invested.

Apparently when you buy gold you're losing 20% plus inflation. If you buy $1,000.00 and immediately re-sell it you're only getting $800.00. You would have to wait until gold gained 25% in value over its purchase price ($1,250.00 at 80%) just to break even -- not including inflation incurred currency devaluation because prices have risen 25%.

Of course this is jewelry we're talking about. Craftsmanship can add more value but I'm surmising the gold is melted down (although I wonder if the rare "finer" pieces are re-sold at higher than by-weight prices).

I recently sold my old car for $1,500.00 (I still weep; I loved that little car so much). THAT was its value because that is what the buyer and I agreed to; not value +/- 20-percent. This gold thing seems tremendously lop-sided in favor of brokers.