ADJUSTING for volatility, Gold Investment offered the best return of any commodity over the last five years, according to data compiled by news agency Bloomberg.
Looking at the period from 24 January 2007 to Tuesday of this week – five years that saw the collapse of several banks, the nationalization of others and the flaring up of the Eurozone crisis, among other events – the Bloomberg Riskless Return Ranking is topped by Standard & Poor's GSCI Gold Total Return Index.
This suggests that a Gold Investment made on 24 January 2007 would, by Tuesday of this week, have delivered a better return when adjusted for volatility – a measure of how much the price moves around – than any of the other 23 commodities tracked by Standard & Poor's.
Silver came second, with some indexes tracking commodities such as crude oil and natural gas showing risk-adjusted losses over the period. Lean hogs came in as the worst performer.
"Bullion, which has seen 11 years of gains as investors sought a haven amid two bear markets in stocks and a sovereign debt crisis, also posted the safest return in the past 12 months," Bloomberg reports, "even as it fell from a record high to a five-month low in the second half of last year."
The findings come in a week when the World Gold Council's latest Gold Investment commentary notes that gold's volatility in 2011 did not rise as much as that of stocks during periods of increased market uncertainty.
The global gold market development organization has produced a number of research reports that demonstrate the effect a Gold Investment can have in diversifying an investment portfolio. For example, last month it published a study showing the potential benefits to Eurozone investors of adding a Gold Investment to their holdings.
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