JAN 24, 2018
There are so many compelling reasons to own gold, and the wider investment world is starting to catch on. Non-traditional asset holdings in US pension funds surged 63% between 2006 and 2016. What characteristics of gold make it so attractive?
Gold is a highly liquid yet scarce asset, and it is no one's liability. It is bought as a luxury good as much as an investment. As such, gold can play four fundamental roles in a portfolio:
A source of long-term returns
A diversifier that can mitigate losses in times of market stress
A liquid asset with no credit risk that has outperformed fiat currencies
A means to enhance overall portfolio performance.
Of course, all these features would amount to little if gold were a perennial investment laggard compared to other asset classes. Quite the contrary. Investors get these enduring benefits in a real, tangible store of permanent value that also happens to offer often-superior annual percentage returns versus its investment competitors: