Gold, a potential role in reducing investor exposure
Gold has a key role as a strategic long-term investment
Recently, Gold as a strategic asset 2025, edition published by World Gold Council (WGC). The report spark all those portfolio player’s by asking, what makes gold a strategic asset?
Gold
has a key role as a strategic long-term investment and as a mainstay allocation
in a well-diversified portfolio. Investors have been able to recognise much of
gold’s value over time by maintaining a long-term allocation and taking
advantage of its safe-haven status during periods of economic uncertainty.
Gold is a highly liquid asset, which is no one’s liability, carries no credit risk, and is scarce, historically preserving its value over time. It also benefits from diverse sources of demand: as an investment, a reserve asset, gold jewellery, and a technology component.
These attributes mean gold can enhance a portfolio in three key ways; 1: Delivering long-term returns, 2: Improving diversification & 3: Providing liquidity. Combined, these characteristics make gold a clear complement to stocks and bonds and a welcome addition to broad-based portfolios.
Moreover,
the shift towards a greater integration of environmental, social and governance
(ESG) objectives within investment strategies has important implications. “We believe
gold can play a role in supporting these. Gold – from established investment
sources – should be recognised as an asset that is responsibly produced and
delivered from a supply chain that adheres to high ESG standards. Gold also has
a potential role to play in reducing investor exposure to climate-related risks,
said the WGC.
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