Gold price hit record high recently as investors rush to traditional “safe haven” to park their money as the global Covid-19 crisis deepens. Gold has always been a faithful friend to longterm investors, outperforming all of the major asset classes including global equities, US equities, US bonds and commodities over the past five, 20 and 50 years.

As a source of long-term returns, gold as an investment is often regarded as one of the more disposable parts of a portfolio. Perhaps, it is time to rethink gold from a long term perspective, not just for crises. As the world’s stock of gold is not going to increase much, gold has been a reliable long-term store of value, providing defence against inflation — unlike a banknote. In addition, among all the major asset classes, only gold and gold equities have typically delivered strong returns during 21st century stock-market downturns. Government bonds kept their noses above water in the last two sell-offs. But with yields so low, it is hard to see these traditional bulwarks against declining stock markets generating sufficient returns to offset poor equity performance.

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