The beauty about gold, though, is that in all states from uncertainty to conviction, it never for once gives up its luster !By Ufuoma Apoki, 2016
Gold. Rare, handsome, and unique. Valued as a store with value for thousands of years, it is a vital and secure asset. It's maintained its long term worth, isn't without delay touched by the economic policies of individual states and does not rely on a 'promise to pay'. Totally free of credit risk, even though it bears a market risk gold has usually been a safe refuge in upset times. Its 'safe haven' attributes attract wise investors. Gold has proved itself to be a useful way to control wealth. For no less than 2 hundred years the price of gold has kept pace with inflation. Another significant reason to invest in gold is its consistent delivery inside a portfolio of assets. Its performance has a tendency to move independently of other investments and of key business indicators. Most investment portfolios are invested essentially in normal monetary assets such as stocks and bonds.
The explanation for holding diverse investments is to guard the portfolio against variations in the value of any single asset group.
Portfolios that contain gold are sometimes tougher and better able to cope with market certainties than those that don't.
Adding gold to a portfolio introduces a completely different class of asset. Gold is strange as it is both a commodity and a financial asset. It is an 'effective diversifier' because its performance has a tendency to move independently of other investments and key economic indicators. Studies have shown that standard diversifiers ( like bonds and alternative assets ) frequently fail during periods of market stress or instability. Even a tiny grant of gold has been shown to noticeably improve the consistency of portfolio performance during both stable and unstable financial periods. Gold improves the stability and predictability of returns. It's not correlated with other assets because the gold price isn't driven by the same factors that drive the performance of other assets. Gold is also noticeably less volatile than practically all equity indices. The worth of gold, real products and services that it can buy has stayed outstandingly stable. By contrast, the buying power of many currencies has often fell. Traditionally, access to the gold market has been through: investment in physical gold, customarily as gold coins or little bars, or, for bigger quantities, by way of the over the counter market, gold futures and options, gold mining shares, frequently packed in gold-oriented mutual funds.