Money managers split on gold as a must-have for investment portfolios

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It can be difficult to prove the case for gold as an effective hedge, mostly because it’s difficult to find a benchmark to measure it against

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As a gold analyst, he carries on a tradition going back thousands of years that views gold as a way to store value over long periods of time, and a hedge against other asset classes through periods of economic turmoil and political strife.It can be difficult to prove or disprove the case for gold as an effective hedge mostly because it’s difficult to find a benchmark to measure it against. The price of gold has fallen in relation to the U.S.

Mr. Pollitt’s advice to advisors is to steer clients toward gold funds with a portion allocated specifically to gold. In addition to not acting as a hedge against equity market losses during the pandemic and post-pandemic inflation, his charts show gold and gold stocks also failed to move inversely during the technology crash of 2000 or during the 2008 global financial crisis.

“We do it because it’s expected of us,” says Bill Harris, partner and portfolio manager at Avenue Investment Management Inc. in Toronto. He advises 5 to 6 per cent of his client portfolios be allocated to the sector as a type of hedge against a financial disaster not seen in recent history.

 

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