As I write this, gold is trading at around $3,900 per ounce.  It had just broken through the $3,000 mark for the first time ever on March 14, 2025.  It was already on a run when it topped $3,000.  It has now gone up about 30% in the last 7 months.

Gold has joined the Everything Bubble with stocks and crypto.  There was been a party with assets for a while that didn’t include gold.  Now gold and silver have gotten into the action, while Bitcoin and U.S. stock indexes continue to touch new highs.

The other thing that has joined the party is gold mining stocks.  The gold stocks did just about nothing for many years, and they looked quite pathetic compared to the overall stock market.  Now the gold miners are finally having their day in the sun.

Just as an example, GDX – the VanEck Gold Miners ETF – is up an astounding 117% year-to-date.  Some of the individual companies that are big players have been extraordinary.  Newmont Corporation (NEM) is up about 125% year-to-date.

Anyone who had been patient with the gold miners and held on has been rewarded in 2025.

Dollar Profits

You could say that the dollar gains in gold and gold stocks is really just a loss in the dollar.  It is the continually depreciating dollar that gives these types of returns.

Whether we like it or not, we live in a world of fiat currency.  For Americans, the dollar is money.  That is what you use to buy food at the grocery store and to pay your bills.

Even if the “profits” this year from gold are really just a representation of a falling dollar, we are still dealing with dollars in everyday life.  That is the measurement we use.  Most people don’t say that the price of a house (or anything else) changed value based of the number of ounces of gold it takes to buy.  A house is priced in dollars, and the transaction and contract are made in terms of dollars.

So, whether you want to consider the dollar-price gain in gold as profits or just retaining value, the question arises of whether you should sell any of it at this point.

If you absolutely knew that the price of gold or gold stocks would fall by 25% in the next 6 months, then it would make sense to sell right now and buy it back after it falls.  After all, you could have more gold and shares of gold stocks if you did this.

Of course, you don’t know what the future holds, but I present it this as a thought experiment.  I am trying to stop the people who reflexively respond, “Gold is money, so you should never sell it for dollars.”

Taking Profits

I recently listened to an interview with David Gardner, one of the founders of the Motley Fool, which is a company that gives investment advice.  He talked about his thought process in buying (and holding) stocks.

One of the big takeaways for me is that you really should hold things for the long term if you bought it as a long-term play.  Personally, my biggest investing mistakes in my life happened when I sold something for a gain.  It wasn’t from the losers that I bought.

I owned stock in both Amazon and Apple a long time ago.  I even rode Amazon through the tech crash in the early 2000s.  I made some modest gains from both stocks at different times.  I sold and took profits.  I should have held, even though I obviously had no way of knowing at the time.

I try not to play the “what if” game too much.  It is easy to do in life.  If I had held, I probably would have turned something like $1,000 into $100,000, or maybe more.  I had bought shares in these two companies because I liked them and saw potential.  So why did I sell?

At the same time, I don’t want to give the impression that you should never sell.  There are plenty of stories out there where people should have taken money off the table and didn’t.  These stories are even more painful.  Imagine having a million dollars in a stock and then watching it go to zero.  It’s fine if you are Warren Buffett, but most people aren’t.

If someone had bought Bitcoin when it was less than $1,000 per bitcoin, they have obviously done quite well.  If they sell it all now, they are missing the chance of Bitcoin going to $1,000,000.  But they are also risking these impressive gains if they don’t sell.

My advice is to look at it in context to your whole portfolio.  If you are worth $5 million and you have one bitcoin worth about $120,000, then you can afford to let it ride.

If you have 8 bitcoins worth almost a million dollars, and that is the large majority of your net worth, then it would be foolish not to sell some of it.  You could easily go from a million dollars to near zero in a short amount of time.

My overall recommendation is to sell some and let some ride (if you still think it is a solid investment).  We aren’t talking about owning a big house.  Things like Bitcoin, stocks, and even gold to a certain extent, are divisible.  If you own 100 shares of a stock that has done very well, you can sell half.  Take some profits while letting some of it ride for the potential of even bigger gains.

Balancing a Portfolio

If you invest in gold as part of a well-diversified portfolio (such as the permanent portfolio), then the answer here is to keep your portfolio balanced.  If you want gold to make up 20% of your overall portfolio, and it is now worth 25%, then sell enough to bring it back down to 20%.

If you have speculated in gold mining stocks, you have made some big paper gains in the last year in terms of dollars.  This isn’t an all or nothing game.  I don’t recommend selling it all because gold mining stocks might continue to go multiples higher of where they are now.

I also don’t recommend holding everything and not taking any profits.

Personally, I have some gold funds in a retirement account.  Because of the recent run, they make up a larger percentage of my account now than they did a year ago.  I am thinking about selling a small percentage.  It may be something like 10%.  The gold funds would still make up a larger percentage of my retirement account than this time last year, but at least I would be taking a little off the table.

There is no right answer here, but I think it is best to stick to a strategy.  If you have something like a permanent portfolio, you should rebalance, which will probably mean selling some gold.  If you own PRPFX, this should be happening for you by the fund manager.

If you have speculated in gold or gold stocks, there should be a deliberate strategy to take some profits while also allowing room for a big homerun.

Regardless of whether it is gold, stocks, Bitcoin, or some other tradeable asset, this is not an all or nothing game.  You can sell 10%.  You can sell half.  If you bought in for the fundamentals of the asset for the long term, then don’t sell it all until you hit a certain target.  You will never be a really successful investor if you are not willing to let the good things run.