“Investing is about positioning capital to profit from the outcomes one expects. Insurance is about incurring a relatively small cost to protect against the outcomes that one does not expect but that may prove catastrophic if they, in fact, occur.” Simon Mikhailovich, Eidesis Capital
As we have already pointed out in our “In Gold we Trust” reports, we believe that every portfolio should contain gold for reasons of diversification and insurance. Numerous quantitative studies show that gold is a successful means of diversification and a reliable store of value. The unique characteristics (especially stock-to-flow) affect correlation and volatility and thus guarantee “real diversification” at times where it is needed the most: during black swan events (i.e. under extreme market conditions).
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