Gold: Insuring What, for How Long?
- Consistent with prior research findings, investors turn to gold as a store of value in times of turbulence. Thus, it consistently acts as a short-run – 30 days during recessions and 80 days during expansions – hedge for all assets studied;
- But over the longer term, gold may actually increase downside risk for stocks as well as bonds, especially during recessionary periods;
- Gold consistently acts as a safe haven for equities and debt during financial crises across all horizons;
- Gold is found to consistently have the highest annualized risk levels, followed closely by equities and then bonds.