Take a closer look at Gold’s importance as strategic diversifier

Gold has long been a tool for strategic diversification, owing to its unique qualities and more importantly, it’s stable value. During market downturns, it has also demonstrated negative correlation with falling equity prices. Little wonder then, that it has acquired a reputation for being a safe haven asset.

For viewers contemplating investing in gold, all these key qualities of gold as a strategic diversifier were enunciated in the first edition of The Gold Investor’s Guide, through an explainer video titled “How Gold gives strategic diversification to your portfolio?”, presented by World Gold Council, in association with Moneycontrol. It’s a comprehensive look at how Gold fits into a diversification strategy under a variety of market conditions, and via a range of investment tools.

The analysis employed to make the case for Gold’s value as a strategic diversifier relies on a wealth of data collected on Gold’s performance in different markets and different market scenarios. It also provides a handy comparison between Gold’s performance and performance of other asset classes under similar macro-economic conditions. The data set is extrapolated to also provide investors an estimate of Gold’s long-term portfolio performance.

As demonstrated in the explainer video, Gold’s significance as a strategic diversifier grows with the duration of the investment and prevalent market volatility. The size of the investment portfolio matters less, as long as individual investors allocate a sufficient portion of it to Gold investments. These factors have been further exacerbated by the pandemic-related market sell-offs, which has seen a resurgence of interest in Gold’s role as a strategic diversifier.

Aside from making a compelling case for including Gold investments in an investment portfolio, the explainer also provides a rough guide to how investors can diversify their investments effectively. It lists out the risks and opportunities for investors to be mindful of, before embarking on the Gold investment journey.

For more great insights, watch the full video here

Moneycontrol journalists were not involved in the creation of the article.