• Why diversify into Gold?
• How to diversify with Gold?

Precious metals remain the ultimate safe-haven assets and gold is the precious metal and universal currency par excellence.

Unlike paper investments such as bonds and equities whose value is dependent on the performance of governments, corporations and the global economy, gold is a hard, tangible, very limited in supply asset whose value is intrinsic to nature.

The Bank of England has warned in its recent Financial Stability Reports of increasing macroeconomic and systemic risk facing the UK economy and in this environment, gold’s safe haven credentials are again coming to the fore and it is important for investors in the UK to focus on asset allocation and diversification.

Many investments, including that other hard, tangible asset property,  are increasingly speculative in nature and based on huge levels of debt. Stocks & property in the western world have appreciated massively in value in the last 27 years.

Gold on the other hand has been in a bear market since 1980 when it hit $887 per ounce. It bottomed in April '01 at $254 per ounce and has been steadily appreciating ever. Many commodity and currency analysts believe that gold will surpass it's 1980 highs of $887 per ounce ( some $2,400 adjusted for inflation) in the coming years as oil and other commodities have already done.

Gold’s value is intrinsic and it is thus one of the few assets that represents no bank, financial institution, multinational corporation or government's liability or ability to repay. Thus owning gold helps eliminate third party and counter party financial risk. This is particularly important when there are liquidity crises, credit crunches and global systemic crises.

Gold is the ultimate insurance against economic and financial difficulties. One purchases health insurance for one's family and oneself not in anticipation of severe health problems but simply in case of that eventuality. Similarly one should invest in or save in gold not in anticipation of economic or financial difficulties but simply in case of them. When we buy home insurance or car insurance we are acting out the old proverb of "hoping for the best and preparing for the worst", similarly gold is not the preserve of doom and gloom merchants rather prudent individuals who hope to protect, preserve and grow what wealth they have been fortunate enough to gain through their hard work and or financial acumen. One does this through diversifying it into the safest asset known to man - gold.

While gold has taken a secondary role to stocks, bonds and property in the last 20 years, an unprecedented era of prosperity for many in the developed world, many astute financial analysts recommend that between 5% and 20% of every investor's portfolio should consist of the ultimate of hard assets - gold.

The price of gold has an inverse correlation to the traditional asset classes over the long term. This gives balance and protection in a world that is changing quickly environmentally, economically and geopolitically. Over the long run, gold has maintained an excellent track record in maintaining its purchasing power relative to and outperforming other financial assets. It is the only asset that is not someone else’s liability and remains the ultimate safe haven asset.

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