If you buy 16 ounces of gold then you have a pile of metal. 5, 10, 20 or 50 years from now it'll still be a one pound pile of metal. Bonds essentially offer t

If you buy 16 ounces of gold then you have a pile of metal. 5, 10, 20 or 50 years from now it'll still be a one pound pile of metal. Bonds essentially offer the same deal, only you trade a pile of money now for a slightly larger pile of money in the future. Investing in stocks however buys a piece of a growing entity. You buy stock now and the company buys a tractor, a truck, a robotic assembly line, researches some new polymer, hires staff, invests in its own growth and actually produces goods. As time goes on the company is always trading in current dollars. Of course there is risk, but If I buy gold now I'm only ever going to own that much gold in the future and the price is entirely based on some other gold-buyer willing to buy a hunk of metal to sit on himself. Buffet says it better right in the article though which I think people here failed to address. "Our country's businesses will continue to efficiently deliver goods and services wanted by our citizens. Metaphorically, these commercial "cows" will live for centuries and give ever greater quantities of "milk" to boot. Their value will be determined not by the medium of exchange but rather by their capacity to deliver milk."