I heard that some people treat gold as a store of wealth, only to get caught in a trap. Recently, a well-known investor openly stated during a public sharing session that this path is simply not feasible.

His point is very straightforward: although gold prices have surged wildly over the past year, investors have no way to determine whether the pricing of gold is correct or not. Why? Because gold itself does not generate any cash flow.

Compare it with assets like stocks, bonds, or real estate, which can generate actual returns, and the market prices them based on expected earnings. But gold is different — how do you value it? What logic do you use? Frankly, there’s no way.

There are lessons from history. Remember 2008? Oil prices once soared to $147 per barrel. Analysts explained it was due to tight oil supply and reserves held by countries with poor relations with the US. Sounds reasonable, right? But when the global financial crisis hit, oil prices instantly dropped to $40 per barrel. None of the original reasons changed, yet the price was worlds apart.

This is the trap of hard asset investing — no one can clearly determine how much a barrel of oil or a gold bar is really worth. Converting those qualitative factors into actual prices? No way. The logic for gold is exactly the same.

Think about whether you’ve ever been stuck on a certain asset.