"The role of gold in investment portfolios" white paper

Gold’s enduring allure and utility as an asset class have sparked substantial discourse among investors and financial professionals.

This white paper explores gold’s historical and quantitative significance in diversified investment portfolios. Our analysis spans from 1973 to 2023, a period notable for significant economic changes and monetary policy shifts following the U.S. departure from the gold standard.

Using a robust quantitative approach, we ascertain the optimal gold allocation in a typical balanced portfolio (60% equities, 40% bonds). We find that allocating between 1% and 34% of the portfolio to gold, with an optimal mark of 17%, substantially improves the portfolio’s risk-adjusted returns.

We also examine various market conditions, including negative real interest rates, equity bear markets, and high inflation periods, to evaluate gold’s performance relative to other major asset classes. Contrary to conventional wisdom, our results support a strategic inclusion of gold to enhance portfolio resilience against market volatility and economic uncertainty.

This white paper is provided for information purposes only. It should not be used or construed as an indicator of future performance, an offer to sell, a solicitation of an offer to buy, or a recommendation for any security. Flexible Plan Investments, Ltd., cannot guarantee any particular investment’s suitability or potential value. Information and data set forth herein have been obtained from sources believed to be reliable, but that cannot be guaranteed. Before investing, please read and understand Flexible Plan Investments, Ltd., ADV Part 2A and Part 3 (Form CRS) 1. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Inherent in any investment is the potential for loss as well as profit. A list of all recommendations made within the immediately preceding 12 months is available upon written request.