Dan Mikulskis'  Instablog

Dan Mikulskis
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I advise institutional investors on investment strategy and using derivatives. In previous roles I've modelled and traded volatility products across FX and equity markets.
  • Does Gold Belong In An Institutional Investor's Portfolio ? 0 comments
    May 13, 2013 3:29 AM | about stocks: GLD, GSG

    It's a question that's been on my mind for a few weeks. Ever since the gold price saw moves which amounted to experiencing an entire year's worth of volatility in a single day, I've been wondering whether such an asset deserves a place in the portfolio of a long term investor seeking diversified sources of return.

    Warren Buffet famously said of gold :

    "[Gold] gets dug out of the ground in Africa or someplace. Then we melt it down, dig another hole , bury it again and pay people to stand around guarding it. It has no utility, anyone watching from Mars would be scratching their head."

    Despite Buffet's views, gold bulls would point to the fact that gold has supposedly held its purchasing power over thousands of years , whereas gold bears point to a 20% peak-to-trough decline in price this year alone as evidence that gold is far from the "safe-haven" asset that some would claim.


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: GLD, GSG
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