Gold: hedging against tail risk

Published 15th October 2010

Categories: Investment

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This report shows that gold does not only help to increase expected risk-adjusted returns in a portfolio but can also significantly mitigate the potential for wealth to be eroded by extreme events, as evidenced by statistical analysis of tail risk scenarios. Investors who do not hold gold or view it purely as a temporary safe haven asset are failing to harness its full potential to protect wealth.