If you ask the world's wealthiest investors, they will tell you that diversification and balance are the keys to a strong financial portfolio; if, for instance, your RRSP is weighed in assets bound by dollars, such as stock and bonds, you are at a very high risk of losing much of your investment whenever there is a financial crisis. Therefore, it is important to diversify your investments to be on a safer side. For instance, the recent financial crisis of 2008 saw stocks and bonds fall in value, and alternative assets such as hedge funds and real estate did not help because they all failed with stocks and bonds. Through this time, however, gold investments gained an average of 32% per year, helping portfolios carry returns throughout the downturn.
Historically, gold and silver have always been in demand, and are actually the most enduring form of currency in the world, having not been the basis of money since the beginning of 'money' in the late 4th millennium BC. Since gold prices have a significant correlation against traditional investments, investing gold in your RRSP will likely help reduce the risk of your portfolio for any future and current financial instability. Gold is a true store of value; it’s affordable; it’s undervalued; it is a good hedge against inflation; it has no counter-party risk, and it is not someone else liability; therefore, if you acquire gold from a accredited, quality source in Canada like Guildhallwealth.com online, your gold can be an excellent protection against unpredictable economies and financial crises. And Canadians could use gold at the moment.
According to the Bank for International Settlements (BIS), there are several notable flashing indicators of a financial crisis in Canada, and the country debt has reached levels critical enough to prompt financial problems in the future. Additionally, there is a heightened global geopolitical risk across the globe. For this reason, top investors are now looking to reduce their exposure to events unfolding in the U.S and Syria, Iran as well as North Korea, which clearly show no sign of dissipating. A recent report from Financial Times indicates that with such events, the VIX (Volatility Index) is trading at historically low levels and investors believe that the index will remain low, meaning nations are increasingly identifying with assets such as gold and silver, and their central banks are changing policies to acquire as much gold and silver as they can.
What does this mean to you as an investor? That it is high time to consider diversifying your portfolio, and that it is time to consider investing gold in your RRSP, joining top investors by buying gold in Canada this fall. Like any other market, gold and silver markets are subject to volatility and speculation, but compared to other investments, they both have the most efficient haven and a good way to hedge against inflation. Unlike other traditional portfolios, both are considered a good hedge against inflation because they tend to retain and increase their value during an inflationary period and long-term inflation in general, making it the top choice of the world’s savviest investors.
Published by Shubhi Gupta