If gold bullion had been introduced into an Australian investment portfolio in the past 5-10 years, it would have reduced the volatility of investment returns, according to a report by PricewaterhouseCoopers (PWC).
The study, written by Australian consultant David Knox of PWC Actuarial and commissioned by Melbourne-based Investor Resources, was prompted by initiatives of the Australian Gold Council (AGC) to devise long-term strategies to promote investment demand for gold.
Investor Resources studied global investment analysis with the aim of answering the question: What impact would gold bullion have if it had been included in an Australian investment portfolio a decade ago?
The report’s key findings are as follows:
q The introduction of gold bullion into a portfolio in the past 5-10 years would have reduced the volatility of investment returns.
q Over the past five years, the “best” asset allocation for the period would have included 2.5-7.5% gold bullion.
q When other assets fall in price, gold generally does not.
“Investor Resources is now working with the AGC to determine how investors might more easily invest in gold bullion,” says Graham Tuckwell, managing director of the former. “Although investors can readily buy shares in Australian gold companies, it is not nearly as easy to purchase gold bullion.”
The report is available online at www.australiangold.org.au/vault/034_investment.cfm
— The preceding is from an information bulletin published by the Melbourne-based Australian Gold Council.
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