Gold as an Investment Asset: Perspectives from Different Countries

Journal of Investing, Fall 1997

Posted: 20 May 1998

See all articles by Robert Johnson

Robert Johnson

University of San Diego - School of Business Administration

Luc A. Soenen

California State Polytechnic University, San Luis Obispo

Abstract

The efficiency of gold as a portfolio component over 1978 - 1995 is examined here from the perspective of seven major industrialized countries. Gold offers diversification benefits but dismal performance in terms of a risk-return trade-off. As a result, the inclusion of gold in test portfolios did not provide any increase in risk-adjusted return over the period as a whole. It was an attractive component of a diversified portfolio only for the subperiod 1978 - 1983 and never thereafter.

JEL Classification: G11

Suggested Citation

Johnson, Robert and Soenen, Luc A., Gold as an Investment Asset: Perspectives from Different Countries. Journal of Investing, Fall 1997. Available at SSRN: https://ssrn.com/abstract=82935

Robert Johnson (Contact Author)

University of San Diego - School of Business Administration ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States
619-260-4849 (Phone)

Luc A. Soenen

California State Polytechnic University, San Luis Obispo ( email )

College of Business, Dept. of Finance
Bldg #003, Business Room #448
San Luis Obispo, CA 93407
United States
805-756-2821 (Phone)
805-756-1473 (Fax)

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