The Role Of Gold – A Less Than Perfect Inflation Hedge

Northern Trust
By July 30, 2020 13:25

The Role Of Gold – A Less Than Perfect Inflation Hedge

The Role Of Gold A Less Than Perfect Inflation Hedge

Gold has been on a tear over the last year, rising 32% while global equities have languished. Investors buy gold for many reasons, but a common objective is a hedge against some type of risk. In this report, we show how gold can reduce downside risk during big down markets, but that it isn’t the most effective inflation hedge. Gold’s strong performance over the last year has some investors wondering if it is time to add gold to their portfolios. We aren’t recommending gold, as we find the current outlook for gold prices too uncertain. We believe that investors should be compensated for the risks they take in individual investments, and that every asset should have a purpose. We do not have a strategic allocation to gold as, over the long term, gold doesn’t generate returns sufficient enough to justify its risk levels.

Northern Trust
By July 30, 2020 13:25


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July 2020