The Institute of International Finance (“IIF”) reports that global debt reached $337.7 trillion at the end of the second quarter of 2025. More concerningly, the International Monetary Fund (“IMF”) projects that global public debt will approach or slightly exceed global GDP by 2029. This makes it timely to examine established and constructive stores of value, the asset classes that families and institutions have long used to preserve wealth across economic cycles and generations. In an era of persistent inflation risk and periodic monetary expansion, identifying reliable stores of value remains essential for long-term capital preservation.
Reliable stores of value typically possess several key characteristics:
- Scarcity: The supply is limited, which helps maintain stable or increasing demand and prevents devaluation from overproduction.
- Durability: The asset can withstand repeated use and the passage of time without physical deterioration or loss of quality.
- Portability: It is easy to transport and exchange for goods and services.
- Divisibility: It can be easily divided into smaller units without losing its proportional value, which broadens its use within the economy.
- Acceptability: It is widely recognized and accepted as valuable by others.
Various assets have served as a store of value throughout history and in modern economies:
- Precious Metals: Gold and silver have been classic stores of value for centuries due to their durability, scarcity, and consistent demand, often acting as a safe haven during economic instability.
- Stable Currencies: In developed economies, stable national currencies like the U.S. dollar, Japanese yen, and Swiss franc serve as a primary store of value in most scenarios. However, high inflation can erode purchasing power, diminishing their effectiveness.
- Real Estate: Land and property are common stores of value due to their tangibility and potential for appreciation, though they can be illiquid (difficult to quickly convert to cash).
- Collectibles and Art: Items like fine art, antiques, and rare gemstones can retain or increase their value over time due to rarity and demand.
- Interest-bearing Assets: U.S. Treasury bonds and savings accounts can qualify, as they preserve principal value while generating income.
- Cryptocurrencies: Assets like Bitcoin are increasingly viewed as a store of value by advocates due to features like a finite supply and durability, though their volatility remains a subject of debate.
“All currencies devalue or die, and when they do, cash and bonds (which are promises to receive currency) are devalued or wiped out” (Ray Dalio). We evaluate gold, private credit, real estate, equities, and collectibles using Sharpe ratios, a common measure of risk-adjusted return. Fiat currency is intentionally excluded. Although it is indispensable for daily transactions, it continually loses purchasing power, typically 2% or more per year due to inflation, and its worth depends entirely on confidence in the issuing authority. The U.S. Federal Reserve provides an illustrative example. From its formation in 1913 until the 2008 Global Financial Crisis, the Fed’s balance sheet expanded from virtually zero to roughly $800 billion. As of March 2025, the balance sheet stands at $6.7 trillion. This expansion underscores the counterparty and monetary-debasement risk inherent in fiat currencies—risks reminiscent of the 1970s inflationary decade—and reinforces the relevance of alternative stores of value. Current US Government debt now surpasses $38T, which may be why currencies are struggling, as “Printing a lot of currency and devaluing debt is the most expedient way of reducing or wiping out debt burdens” (Ray Dalio, Facebook 2026).
Cryptocurrencies have also been excluded. Although Bitcoin has exhibited periods of high returns, this has been accompanied by extreme volatility and frequent drawdowns. Despite growing institutional adoption, Bitcoin’s long-term reliability as a store of value remains uncertain.
Top Asset Classes as Stores of Value:
Key Considerations for Portfolio Construction
- Long-Term Cycles in Flux: The traditional negative correlation between stocks and bonds is being tested in the current economic environment. Other trends that could impact portfolios include the energy transition and decarbonization, the adoption and integration of AI, potential real estate repricing after the post-COVID boom, elevated public debt levels, and potential deglobalization.
- Short-Term Considerations: Big tech concentration continues to dominate returns, long duration bonds remain out of favour as real yields stay elevated, a softening U.S. dollar could support non-U.S. assets periodically, and continued corporate capex in AI infrastructure will be required to sustain profit forecasts.
- Inflation Resilience: Real assets and floating-rate loans historically provide the best protection in inflationary regimes.
- Liquidity: Equities and gold offer broad, efficient liquidity across market environments.
- Collectibles: Require specialist knowledge; liquidity depends heavily on stewardship and market access.
Conclusion
Over the past three millennia, gold, real estate, and private credit have demonstrated some of the most consistent risk-adjusted returns among recognized stores of value. While real estate continues to adjust to its post-COVID repricing cycle, gold and other real assets remain effective tactical hedges during periods of inflation or market dislocation. At the same time, private credit has emerged as a compelling modern counterpart, delivering reliable income, inflation protection, and superior Sharpe ratios relative to many traditional stores of value. Ultimately, a diversified allocation, thoughtfully calibrated to each investor’s liquidity needs, time horizon, and risk tolerance, remains the most prudent framework for preserving and compounding wealth through stores of value in an increasingly uncertain global environment.
About Bond Capital
Bond Capital is an award-winning private credit fund. As a direct lender, Bond Capital provides advice and money across the entire risk curve. Bond Capital secured structured credit financing enables business owners to maintain control ownership in exchange for yield and capital preservation. Across multiple cycles and for over 20 years, Bond Capital has advanced secured investment quality credit to lower middle market companies throughout North America.
