Topic

Strategic Asset Allocation with Gold

Hi,

Are there any SAA strategies with Gold as a significant component?
A review of the past 15 years of performance shows that Gold (say GLD ETF) has performed as well as the S&P500. And a 50:50 allocation between Gold and SPY etf would have had less drawdowns than either one separately.
rptrader1 asked · 05/19/2020
Re.
  • #1
  • The best well known SAA strategy with Gold is Permanent Portfolios. There are many variations to adjust Gold's weight. On the other hand, Gold is notoriously known to be widely volatile and hard to predict. In our opinion, some small allocation makes sense, if you really want to get exposure to it. 

    Another well known mutual fund that has long used Gold is First Eagle funds. You can take a look at. 
    Admin · 05/21/2020 13:41:21
  • #2
  • Thanks ... Not sure i understand the statement "Gold is notoriously known to be widely volatile and hard to predict". Regarding Volatility, since 2000, the S&P500 has suffered several declines. Is it less volatile than Gold? Gold has only dropped 42% from 2011-2015. Gold dropped much less in this March pandemic than the S&P500. In 2007/2009 decline, Gold dropped 31%, less than the S&P500's 55%. As for prediction, can anyone predict accurately about the S&P500? Based on the 2000-2020 history it seems Gold has delivered at least as well as the S&P500 if not better. Comments?
    rptrader1 · 08/26/2020 12:12:47
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