The Portfolio Implications of Gold Investment

Posted: 22 May 2019

Date Written: July 15, 2015

Abstract

This paper investigates the use of gold as an investment asset. The data consist of U.S. and foreign equity returns from 1975-2005. The results indicate that investment in gold is inferior to a simple buy-and-hold strategy of U.S. equities over the long-term. Gold is often believed to provide potential as a defensive asset, given its low correlation with U.S. equities. However, a portfolio optimization technique using actual and simulated data indicates that the long-term portfolio benefits of holding gold are marginal at best.

Keywords: gold, investment

Suggested Citation

Ratner, Mitchell and Klein, Steven, The Portfolio Implications of Gold Investment (July 15, 2015). Journal of Investing, Vol. 17, No. 8, 2008, https://doi.org/10.3905/joi.2008.701958, Available at SSRN: https://ssrn.com/abstract=2631063

Mitchell Ratner (Contact Author)

Rider University ( email )

2083 Lawrenceville Road
Lawrenceville Township, NJ 08648
United States

Steven Klein

Rider University ( email )

2083 Lawrenceville Road
Lawrenceville Township, NJ 08648
United States

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