How to Compare the Cost of Holding Gold, Stocks and Bitcoin
A framework for comparing holding costs across assets, anchored on the SEC's fee illustration—where a 1.00% annual fee left roughly $179,000 of a $100,000, 4%, 20-year investment versus about $208,000 at 0.25%.
You cannot compare holding costs across gold, stocks and bitcoin with a single number, because the fee structures differ. What you can do is apply one consistent method: list every recurring percentage cost, convert fixed costs into an annual percentage, add them up, and then apply the total to a long horizon. The SEC's investor bulletin gives a clean illustration of why this matters.
The bulletin describes a hypothetical $100,000 investment growing 4% annually over 20 years. With an annual fee of 0.25%, the portfolio would be worth approximately $208,000. At 0.50%, approximately $198,000. At 1.00%, approximately $179,000. The bulletin's point is that fees reduce the amount of money in your portfolio earning a return.
Start with the SEC's illustration
The three outcomes come from the same starting amount, the same growth rate and the same time window. Only the fee differs. That makes the illustration a controlled comparison of fee drag, not a forecast.
| Annual fee | Value after 20 years (source figures) | Gap vs. the 0.25% case (Calculation) |
|---|---|---|
| 0.25% | approximately $208,000 | — |
| 0.50% | approximately $198,000 | approximately $10,000 (Calculation) |
| 1.00% | approximately $179,000 | approximately $29,000 (Calculation) |
The gaps in the third column are my subtractions of the rounded source figures, not figures the bulletin reports. They are labeled Calculation for that reason. Even allowing for rounding, the pattern is consistent: a higher recurring fee leaves less capital working for you.
Translate this into a cross-asset checklist
The bulletin does not assign its fee levels to gold, stocks or bitcoin. The mapping below is a framework for organizing your own research, not a statement of what any product charges.
- Identify the recurring percentage fee. For a fund or fund-like product, this is the expense ratio or management fee. For a directly held asset, the equivalent may be a storage or custody charge.
- Convert fixed costs into an annual percentage. A flat account or custody fee is not a percentage, but you can express it as one by dividing it by your position size. A fixed fee hurts a small position far more than a large one.
- Add transaction and rebalancing costs separately. Trading spreads and commissions are not annual fees, so keep them in a separate bucket rather than blending them into the recurring figure.
- Check the disclosure documents. The bulletin advises reading them to find out what you will be charged, noting they are typically available online or in paper form.
- Apply the total to a long horizon. This is where small annual differences compound, as the illustration shows.
A worked example with labeled assumptions
Suppose an investor wants to compare three wrappers for the same asset exposure. This is entirely Hypothetical: the 0.25%, 0.50% and 1.00% fee levels are placeholders borrowed from the SEC illustration, not measured costs for gold, stocks or bitcoin.
Hypothetical: a gold fund wrapper at 0.25% annual cost, a stock fund wrapper at 0.50%, and a bitcoin product wrapper at 1.00%. Applied to the bulletin's $100,000, 4%, 20-year scenario, the ending values would be approximately $208,000, approximately $198,000 and approximately $179,000 respectively. The illustration does not say these are the real fees for those assets. The exercise shows only how sensitive a long-horizon result is to the fee level you enter.
Now change one assumption. Hypothetical: keep the 0.50% fee but add a fixed $100 annual custody charge on a $50,000 position. That fixed charge equals 0.20% of the position each year, lifting the effective recurring rate to roughly 0.70%. On a $500,000 position, the same $100 is about 0.02%. The fee is identical; the drag is not. This is why position size belongs in any cross-asset cost comparison.
Watch the time window
The bulletin's figures depend on a 20-year window and a 4% annual growth assumption. Change either and the dollar gaps change, even with the same fee levels. If you compare gold, stocks and bitcoin using different horizons for each, you are not making a like-for-like comparison.
The bulletin also warns that fees may seem small but over time can have a major impact, because they reduce the money earning a return. That mechanism is asset-agnostic. It applies whether the wrapper holds bullion, equities or a digital asset.
What the source does not say
- It does not name gold, stocks or bitcoin, or associate its three fee lines with any asset class.
- It does not provide real-world fee levels for any product, fund or custodian.
- It does not address storage, insurance, custody, spreads, taxes or bid-ask costs for physical or digital assets.
- It does not model volatility, drawdowns or the risk that one asset's value falls while another rises.
- It does not say its illustration predicts actual returns; the 4% growth rate is an assumption, not a forecast.
Practical takeaway
Compare holding costs by building one consistent table: recurring percentage fees, fixed costs converted to a percentage of your position, and separate transaction costs, all over the same horizon. Then apply the total to a long-run illustration like the SEC's. The bulletin's core instruction is to understand and compare the fees you will be charged, and it notes that doing so could save you a lot of money in the long run. The asset-specific inputs are yours to gather from each product's disclosure documents.
Sources
Informational only. Not financial, legal or investment advice. Check the primary sources listed above before you act on anything here.