Should long-term investors consider including gold in their portfolio? Most portfolio theories will tell you that gold and other metals should at least be a small percentage of everyone's portfolio, if nothing else to hedge against a crashing market.

But if you don't time gold investments correctly, they make little sense versus investing in a simple stock index fund. In my opinion, those with a long-term investing horizon should ignore gold altogether, and here's why.

Stocks outperform
When comparing stocks with gold over the long term, gold really doesn't have a leg to stand on. Over the past 20 years, gold is up 283% while the S&P 500 (SNPINDEX:^GSPC) has generated a 433% return. 

Gold Price in US Dollars Chart

Gold Price in US Dollars data by YCharts

If we move the timetable out to 25 years, the S&P has gained 983% while gold is up just 226%.

Gold Price in US Dollars Chart

Gold Price in US Dollars data by YCharts

If we look at the blue-chip Dow Jones Industrial Average (DJINDICES:^DJI) versus gold since the turn of 2009 when retail investors were flooding into gold, we see the same thing. The Dow outperforms gold 65.3% to 59.5%. 

One of the reasons stocks outperform long-term is because companies create cash flows each year, often paying them back to investors in the form of dividends. Gold generates no cash flow at all. Some will argue that it's a hedge against all kinds of bad things, but is that really true?

The hedge against everything
Going into the financial crisis, the thought with gold was that it would hedge against rising federal debt, a worsening economy, the Fed's printing of money, and general fear in the market. Those factors helped drive gold higher for a few years, but unless all of those factors are true indefinitely, the gold trade runs into a wall.

Today, the economy is slowly improving, the Fed is pulling back on stimulus, and even the deficit is dropping rapidly. As a result, gold is down 18% over the past year.

The hedge against everything works well if the economy tanks, but gold has proved not to be a good long-term investment, especially when compared with stocks. Long-term investors should look past gold as parts of their portfolios because those who've made money on gold over the past three decades have had to time the market correctly in both buying and selling. Long-term investing isn't about timing; it's about buying great companies and letting them work for you, preferably paying you back in the form of a dividend. 

Fool contributor Travis Hoium and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.