Optimal Diversification Brings Portfolio Security and Performance

A well-diversified portfolio ideally comprises assets whose returns move in opposite directions. Such assets are called “inversely correlated.” When two assets in the same portfolio are inversely correlated, you have achieved effective diversification—and that should be your goal when you diversify your portfolio.

When you have a retirement account that only has different types of paper assets such as stocks and bonds, you are not diversified in an effective or optimal way. When the market implodes, those assets will drop—and typically they’ll drop at the same time, pulling your entire portfolio down with them. 

You can only achieve true and effective diversification and real portfolio protection if you own a hard asset outside the mainstream financial markets to diversify your paper assets that are inside those markets.

There’s one asset that stands out: gold. As one of the assets that are the least correlated to stocks, the precious metal will safe-guard your portfolio when the stock market tumbles. 

Over the last 20 years, we had a few stock market crashes, and each time the price of gold shot up. This is the way gold can insure your portfolio during market corrections, like the one we are experiencing now. The chart below is a great example of this inverse relationship, which occurred over the past five stock market corrections. In each case, gold proved its value in helping your entire portfolio recover during financial instability. This is how a portfolio is diversified.

Wouldn’t you want to include an asset in your portfolio that has a proven record of countering the risks and threats to your long-term retirement goals? Gold will bring you peace of mind.

Schedule a Free Consultation

Talk with a customer service agent about the benefits of gold and silver

Take a few moments to learn more about the potential of gold and silver to enhance your retirement portfolio.

If you’re unfamiliar with the process of purchasing physical precious metals, you surely have a lot of questions. Gold Alliance offers a range of resources to help you.

FAQs

Please visit our FAQ pages for a Precious Metals IRA and for a Direct Delivery purchase for easy-to-understand answers to questions that we commonly get.

Call Us

888-734-7453

and share your goals and concerns with one of our knowledgeable gold and silver specialists on a free,
no-obligation consultation

Gold Alliance News

7 Essential Tips for Anyone Considering Gold as an Investment

The decision to invest part of your wealth in any asset is an important one. In this article, we’re highlighting 7 tips that our clients found helpful during the process that led them to investing in gold.