Wednesday, December 7, 2011

New report shows that gold is not only prudent but vital to a balanced portfolio

The debate over how to hold a balanced and equitable portfolio has been argued over for ages, with many paradigms being shattered as one economic crisis replaces another.  From buy and hold, to diversification, to high-risk young, low-risk old strategies, the number of ways to invest are as prevelent as the number of brokers.

But a new independant study on investing shows that in today's economic environment, holding and owning gold is not only prudent, but vital for both wealth protection, and system breakdown protection.

The independent research from highly respected New Frontier Advisors (NFA) confirms the importance of gold as a portfolio diversifier to investors in Europe and to investors exposed to the euro.
 During a period of extraordinarily serious economic uncertainty in the Eurozone, continued concerns about economic growth in the US heading into an election year, and the possibility of an economic slowdown in China, the World Gold Council (WGC) wanted to examine the relevance of gold as a strategic asset for euro-based investors to protect their portfolios and to mitigate the systemic risks being faced.
The report, ‘Gold as a strategic asset for European investors’, commissioned by the World Gold Council, explores gold as a strategic asset across five sets of asset allocation studies, including four using historical data spanning 1986 to 2010, and one using the 1999 to 2010 time frame.
 The third party research builds on the now considerable research and academic literature showing that gold adds significant diversifying power due to its low or negative correlation with most other assets in an investment portfolio.
 Gold’s relevance as a strategic asset is continuing to grow. This will continue in a world facing the real risk of a global recession and even a Depression, poor investment returns, currency devaluations and wars and very high monetary and systemic risk.
 Put simply, when used as a foundation asset, gold has preserved wealth throughout history and again today.
 Gold’s unique properties will protect savers and investors in Europe and internationally against the monetary and systemic risks being faced in 2012 and in the coming years. - Goldcore

While this study focusses mostly on Europe, all one in America needs to do is go back three years and see how close our own economic system came from default and collapse.  The environment here and abroad is 10 times worse than 2008, and the opportunities for currency collapse are growing, while gold remains constant as the sole hedge against that collapse, and a vital part of anyone's portfolio in today's market.

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