Gold Investments and Risky Assets
What is the Value of Gold Investments and Risky Assets?
The value of gold investments cannot be estimated, and this present a risk of constant fluctuation in its value. Authors who offer marketing dissertation help at Edudorm essay writing service points that this is based on the fact that price of gold fluctuates widely at times regardless of the currency used to measure it. That said, gold investments can lose a substantial amount of its value within a given period of time and thus it has no significant return on investment (Kramer, 2016).
Insurance of Gold Investments
However, the little or below average return of gold investments are acceptable in a portfolio since it can be used as an insurance to the investor who has his primary assets being financial. It is thus an insurance against potential catastrophic assets facing the assets such as hyperinflation and war (Nathan, 2011). Writers who offer marketing management assignment help at Edudorm essay writing service notes that there are varying opinions on the amount of gold and other metals to be included in one’s portfolio which on the length of the investment term one is considering, and an individual’s risk assessment The Market Oracle, (2015). Thus the opinions depend on how one perceives risks and the risk that they are willing to take.
Returns
The returns on gold investments have been fluctuating in a similar manner with that of other stocks though overall the return on investment on other assets has increased significantly. Practically, gold is a non-cash asset and thus has no capacity to generate income.
Dividends of Gold investments
However, if the prices of shares in a portfolio falls, one is certain of obtaining between 2 to 4 percent per annum return in dividends, if a company performs well dividends will increase (Kramer, 2016). Experts who offer marketing assignment help at Edudorm essay writing service indicates that this cannot be said of gold investments. An asset with a low historical return can be valuable in a portfolio since an asset that has been performing poorly in a given period is likely to perform well in another period (Kramer, 2016). Thus, it may offset poor performance of other assets in such a time.
References
Nathan, P. (2011). The new gold standard: Rediscovering the power of gold to protect and grow wealth. Hoboken, N.J: Wiley. 48-49
The Market Oracle, (2015). Is Gold Investing Risk Free?
Kramer, K. (2016). Getting past the all-or-nothing mentality in gold trading.
https://www.morganstanley.com/articles/investing-in-gold
https://www.royalmint.com/invest/discover/invest-in-gold/an-introduction-to-gold-investment
