Along these sections we have studied ways of choosing, measuring and investing mainly in stocks (assets in vogue), and bonds to a lesser extent; however, we have also mentioned the need of diversifying our investments in other kinds of assets, whose properties require other types of studies and variables. Real estate, works of art and precious metals (specifically gold) have different dynamics than stock markets, and their maturity times are in longer terns; however, many investment funds, insurance companies and natural and legal persons feel more protected with these types of assets, and prefer them in their portfolios.
In fact, at this time, it is exactly what is happening with gold investments; after a 20 year streak of completely depressed quotes (bear market), period in which many central banks in developed countries, especially in Europe, sold part of their gold reserves in order to trade them for more “profitable” assets (mainly bonds), increasingly more investors – individuals and legal persons – are taking refuge in the metal in order to diversify their portfolios and keep a better balance between the different types of assets.
Let’s remember that gold has been considered a refuge asset by nature, and it’s precisely in uncertainty periods that the investors seek to maintain a larger proportion of their investments in this asset. For example, in moments when the American dollar is reaching historical minimums before the Euro and presents very low levels before the rest of the strong currencies, gold turns into a protection, for which it is convenient that a diversified investment portfolio keeps an interesting percentage in that metal’s assets.
It is worth mentioning that curiously, these days we are listening that central banks in countries in the Asian Southeast, strongly surplus, are thinking of acquiring larger gold quantities as an investment instrument. Since its worst moment in August 1999 in which the gold ounce quoted at 252 dollars, to November, 2004 (when I’m writing this site) when it quotes at 450 dollars, this asset has had a 78% revaluation; and many analysts predict that very soon (in 2005) it could quote at 500 dollars per ounce.
