Gold has an image problem among young investors. It is often associated with doomsayers, gold bugs, and pessimists who expect the collapse of the financial system, which makes it unappealing to optimistic young investors who are focused on growth and compounding. But this characterization misunderstands the role that gold and other precious metals can play in a portfolio, even one focused on long-term growth. A small allocation to gold provides diversification and a hedge against the specific risks that stocks and bonds do not hedge — currency debasement, high inflation, and systemic crisis — which can improve a portfolio’s risk-adjusted…
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