A common refrain among gold investors over the past several years has been, gold may be rallying, just not in your currency. This statement has been particularly true for U.S. investors, where periods of dollar strength exacerbated the sideways trading nature of gold since 2013.
The 60/40 portfolio, a strategy of dividing assets between 60% large cap equities and 40% bonds, has long served as the de facto benchmark for risk adjusted returns. The sizable equity allocation allows for decent upside capture and long-term growth, while the fixed income pool dampens the volatility inherent to stock ownership.
Will Rhind, CEO of GraniteShares, discusses gold and oil with hosts Lisa Abramowicz and Paul Sweeney.
While diversification may be one of the most common refrains in finance, the irony is that it is home to widespread misconceptions among investors, both novice and seasoned alike. Everyone intuitively understands the wisdom of “don’t place all your eggs in one basket” – such logic extends to everyday life – but investors often find themselves with far fewer “baskets” than they even realize.
What factors account for this discrepancy in diversification?
Over the past 15 years, gold is almost completely uncorrelated with market volatility.
In a world of exotic assets and fast trading, what has become of the world’s oldest asset, gold? Modern finance, where the pursuit of endless sophistication is often confused with success itself, has forced investors to ask a pivotal question: is gold obsolete?