Tuesday, May 13, 2008

Gold should be a significant chunk of one’s portfolio

V. Anantha Nageswaran is head, Investment Research, Bank Julius Baer & Co. Ltd in Singapore and writes a weekly column in Mint , which I love.

Today's article recommending Gold as an important asset for investment is a very insightful read.

...the return of inflation is the biggest scourge of paper money and the biggest argument in favour of gold. Therefore, to look back at history and discredit gold is not very rigorous since, I believe, inflation resurgence makes the case now for gold, if it did not do so earlier.

Equities are denominated in paper money and when paper money loses its sheen, so would paper-backed assets. At least partially, that anxiety drives the campaign to discredit gold as a potential alternative asset for investors.
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