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When two assets in the same portfolio are fundamentally uncorrelated with one another, that’s effective diversification. Uncorrelated assets tend NOT to move in the same direction at the same time, and that’s exactly what you want when you set out to diversify your portfolio.
Unfortunately, many retirement account owners believe they are effectively diversified, but they aren’t.
The only way to achieve true effective diversification – and real portfolio protection – is to own an asset outside the realm of mainstream financial markets.
The chart below reveals gold’s statistically low correlation with key asset classes and markets.
Correlation of Gold with Select Assets and Indices
A correlation of 1.0 indicates perfect correlation between assets.
A correlation of 0.0 indicates that assets are completely uncorrelated.
|CRSP US Total Market Index||CRSP US Small Cap Index||FTSE Emerging Markets All Cap China A Inclusion Index||ICE U.S. Treasury 20+ Year Bond Index||MSCI US Investable Market Real Estate 25/50 Index|
(Data Courtesy of PortfolioVisualizer.com)
If you are like many Americans looking down the road toward retirement, you may be worried about the threats that could compromise your long-term financial goals. Isn’t it good to know there is something you can do to fight back?
If you would like to know more about how gold and silver could help diversify your portfolio, call Augusta and speak with one of our helpful precious metals specialists.