Gold remains silent, yet witnesses the cycles of wealth.
Seven years ago, a woman from Shanghai made a decision that seemed quite bold at the time: she sold a property worth 8.5 million and converted it all into 27 kilograms of gold. This year, when the market price of that property dropped to 6.5 million, she sold 8 kilograms of gold at a price of 830 yuan per gram, easily buying back the original house and additionally renovating it.
Between this buy and sell, not only has wealth been transcended, but it also reveals the operational rules of different assets in different economic cycles. As a practitioner who has navigated the financial markets for many years, I repeatedly ponder the deeper logic behind this case.
Gold and real estate: two entirely different asset attributes
The success of this lady is by no means accidental; it stems from a profound understanding of gold as an asset with 'no sovereign credit risk'. The greatest advantage of gold lies in its globally recognized status as the ultimate payment and safe-haven tool. When the economy is unstable, political turmoil occurs, or inflation rises, gold prices tend to increase.
Real estate is completely different. It combines physical value and cash flow attributes, and high-quality properties in core cities can form a 'moat' for value preservation and appreciation due to population inflow and scarce resources. However, the liquidity of real estate is far lower than that of gold, the transaction process is cumbersome, the monetization cycle is long, and urgent sales often require price reductions during market downturns.
Looking back at the market performance in 2025, gold prices soared by 50% to become the preferred safe-haven, while real estate in core cities only saw a slight increase of 3%-5% and poor liquidity. This stark contrast explains why that lady from Shanghai was able to achieve a leap in wealth—she accurately grasped the performance patterns of the two assets in different economic environments.
The economic cycle determines asset performance
From the perspective of the economic cycle, gold and real estate each have their moments of glory.
In periods of economic prosperity, real estate typically performs well. With economic growth, increased household income, and accelerated urbanization, demand for housing rises, driving up property prices. However, during economic recessions or periods of instability, gold's value-preserving advantages become prominent. When the market is turbulent, currency depreciates, or inflation occurs, gold prices tend to rise.
Between 2022 and 2025, geopolitical conflicts and the global trend of 'de-dollarization' have driven gold prices to rise rapidly. Meanwhile, China's real estate market has bid farewell to the era of 'general increase', entering a new pattern of coexistence of 'structural opportunities' and 'general risks'.
The success of that lady from Shanghai essentially involved shifting assets from fields that might decline to those that might rise before the turning point of the economic cycle.
Liquidity and holding costs: the overlooked key differences
For investors, the liquidity and holding costs of assets directly affect long-term returns.
The gold market has high liquidity, trading continuously 24 hours globally, with ETF monetization fees as low as 0.3%-0.5%. In contrast, real estate transactions are complex, and the entire buying and selling process may take months or even longer, and it also incurs high transaction costs.
In terms of holding costs, real estate incurs multiple expenses such as property fees and maintenance costs, while the holding cost of gold mainly consists of storage fees, which is relatively much lower. This difference will have a significant impact over long-term holdings.
My thoughts on the current asset allocation
Based on long-term observation of the market, I believe that reasonable asset allocation in the current environment should balance risk and liquidity. For ordinary investors, I tend to recommend a combination model of 'gold + real estate + cash'.
Specifically, consider allocating 10%-20% of assets to gold to cope with possible economic fluctuations, while high-quality real estate in core cities should remain the mainstay of long-term asset allocation. Importantly, avoid two extreme operations: one is to sell off real estate to concentrate investment in gold, and the other is to invest fully in real estate with high leverage.
The success of that lady from Shanghai is unique; she happened to make the right judgment at the market turning point. But for most investors, balancing allocations is more feasible than betting on a single asset. Gold can serve as a 'stabilizer' in an asset portfolio, while high-quality real estate in core cities provides rental income and long-term appreciation potential.
Past decisions cannot be changed, but future asset allocation can be optimized. Against the backdrop of slowing economic growth and rising geopolitical risks, the safe-haven value of gold may further enhance; while high-quality real estate in core cities, due to its scarcity, is still expected to maintain stable value over the long term.
Every investor should develop a personalized asset allocation plan based on their financial situation, risk tolerance, and investment goals. In an uncertain economic environment, diversification may be the wisest choice.
What insights do you have on asset allocation? Feel free to share your views. Follow Xiang Ge to learn more first-hand information and accurate points in the cryptocurrency circle, becoming your navigator in the crypto world; learning is your greatest wealth!#加密市场反弹 #美联储降息 $ETH
