What to invest in 2026? A showdown between the S&P 500, gold, and Bitcoin.

Question

Recently, I saw an interesting question: how to choose among the three major asset classes? Let's take a look at the performance differences over the past 5 years.

Data Speaks

S&P 500: Historical annual return of 9-10%, with a cumulative increase of 96% over the past 5 years. This performance is actually quite good, after all, it is supported by leading companies like Apple and NVIDIA.

Gold: It has increased by 118% over the past 5 years, currently at $4090 per ounce. Although it recently pulled back over 30% from its peak, its overall performance has outpaced the market.

Bitcoin: This is fierce. It has risen 362% over the past 5 years. Even after recently dropping over 30% from its historical high, it still leads other assets.

Why are these three different?

The Logic of the S&P 500: What you are buying is a piece of ownership in publicly listed American companies. Coca-Cola's stock price rises because its earnings are increasing, with dividends having increased for 63 consecutive years; Nvidia is booming due to AI, with quarterly profits doubling. Essentially, you are betting on company growth.

The Logic of Gold and Bitcoin: Both are “stores of value” that do not rely on the daily functioning of the U.S. economy. Gold is classified as a reserve asset by central banks worldwide, supported by its scarcity; Bitcoin gains value through decentralization, fixed supply, and high divisibility. Buying them is placing a bet on the premise that governments, institutions, and retail investors will increasingly adopt these assets, thereby driving up prices.

In other words - the S&P 500 is betting on U.S. economic growth; gold and Bitcoin are betting on “I don't trust the dollar.”

How to configure 2026?

There is no absolute answer. It depends on your risk tolerance, existing positions, and investment time.

If your portfolio consists entirely of stocks and bonds, you might consider allocating 3-5% to gold or Bitcoin as a hedge. If you want more technological growth, the S&P 500 VOO ETF has a fee of only 0.03%, which is very cheap.

BlackRock's Bitcoin spot ETF (IBIT) has raised $67 billion in two years. Investing in Bitcoin through this ETF is much simpler than managing it yourself with a wallet, and it also has tax advantages.

Core Advice: Don't get caught up in “which one to choose”; instead, first determine your ideal allocation ratio (for example, 70% stocks, 3% gold, 2% Bitcoin), and then make specific selections within each asset class. This way, you can automatically implement a dollar-cost averaging strategy, saving you from frequent indecision.