What is gold? Gold is described to be unique, beautiful, and rare. It’s an important and secure asset and for thousands of years, it has been treasured as a store of value. It’s not directly affected by economic policies of individual countries, maintained its long term value, and doesn’t depend on a ‘promise to pay.’
Gold is completely free of credit risk but it does bare a market risk and it has been a secure refuge in unsettled times. Wise investors are attracted to its ‘safe haven’ attributes. When it comes to Gold, it is considered and proven to be effective in managing wealth.
For at least 200 years the price of gold has kept pace with inflation. There’s another reason to invest in gold and that’s having consistent delivery within a portfolio of assets. Independently moving of other investments and key economic indicators is the performance of gold. In an investment portfolio, even a small weighting of gold can help reduce overall risk.
Most investment portfolios are invested primarily in traditional financial assets such as stocks and bonds. The reason for holding diverse investments is to protect the portfolio against fluctuations in the value of any single asset class.
Portfolios are generally more robust and can cope with market uncertainties better if they contain gold. Adding gold to a portfolio introduces an entirely different class of asset.
Gold is both a commodity and a monetary asset, which makes it unusual. Gold is also considered as an effective diversifier because the performance would move independently of other key economic indicators and investments.
Studies have shown that traditional diversifiers (such as bonds and alternative assets) often fail during times of market stress or instability. Even a small allocation of gold has been proven to significantly improve the consistency of portfolio performance during both stable and unstable financial periods.
Improving the stability and predictability of returns is gold. Not driven by the same factors that drive the performance of other assets is the price of gold, which means it’s not correlated with other assets. Also, significantly less volatile than practically all equity indices is gold.
The value of gold, in terms of real goods and services that it can buy,has remained remarkably stable. In contrast, there is a decline in the purchasing power of many currencies.
To have access to the gold market, you have to go through investment in physical gold which is usually small bars or gold coins or by way of the over the counter market for large quantities, gold options and futures, gold mining equities often packaged in gold-oriented mutual funds.

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