Jeremy De Pessemier

Investors need to be cautious of the risks of relying too heavily on historic correlations that are prone to change. When the bond-equity correlation flips from negative to positive, a larger allocation to gold is required to retain the initial level of portfolio risk.

We’re delighted to contribute another thought-leader article published in Financial Investigator’s highly regarded magazine. In their September issue, we review the notion that whilst bonds may be en vogue, gold never goes out of style. The article supports our ongoing belief that gold has a key role to play as a strategic long-term investment and mainstay allocation within a well-diversified portfolio.

A lot has been made of the convergence of yields for cash, bonds and equities (on an earnings yield basis), with the higher yield on offer in the cash space leading many investors to reassess their portfolio exposures.

A ceiling on interest rates and headwinds to trend growth make a compelling case for gold in the medium term.

UK financial markets have gone into full-blown crisis in the last few weeks. The government’s ‘mini-budget’ announcement on the 23rd September was poorly received by global investors, leading to a sharp spike in UK government bond volatility.