Despite the number of new Coronavirus cases slowing in China, markets have been spooked by the spike in the number of cases being announced in other regions such as Iran, Korea and Italy. As investors consider the potential flow-on effects of the Coronavirus on markets, many have taken a “risk-off” approach to investing by turning to safe-haven assets such as fixed interest bonds and GOLD. As a result, global sharemarkets have collectively declined and gold stocks have surged.
Our clients have been actively investing and reinvesting into GOLD for the previous 12 months and have benefited from the hedging effect this investment has had on their portfolios as global sharemarkets declined.
The primary advantages of investing in GOLD are:
- Gold is an ideal hedge for financial market risk – that is, the price of Gold will generally go up when the values of most other investments (especially shares) fall.
- Gold is highly liquid – therefore it is generally easy to buy and sell investments in gold.
- Gold increases diversification – including an investment in gold spreads the risk of your investments so you don’t have “too many eggs in one basket”.
The current market volatility shows that if you are relying on your Superannuation and investments to fund your lifestyle now or in the future, then it is important that you invest in a range of assets that are well diversified and are aligned with your age and your tolerance for risk.
If you would like more information about creating or building your portfolio please contact John Kalachian 02 9267 0102 or john@exemplary-financial.flywheelsites.com.
