What are the benefits of owning bullion?

Investment in bullion, especially gold, silver and platinum, should not be considered a short-term speculation, rather a long-term investment that always forms part of your portfolio.

1. It protects portfolios from market fluctuations
Precious metals can rise when stocks, bonds, real estate and Treasury bills fall, acting as a hedge against the instability of other investments

2. Minimizes the impact of inflation
The price of precious metals typically increases with rising inflation, meaning that precious metals offer insurance against inflation.

3. Provides portfolio diversification
Diversification protects investment portfolios. Ibbotson Associates, a world-renowned authority on asset allocation theory conducted a study that concluded investors could improve returns and reduce risk in their portfolios by holding 7% - 16% of gold, silver and platinum bullion. No other investment reacts to market downturns as well as precious metals bullion. It is the best-known portfolio insurance.

4. Tactical asset allocation - taking advantage of normal market cycles
The market moves in cycles lasting approximately 20 years. It is improtant to rebalance your portfolio after trend changes in order to maximize returns and reduce risk.

As these cyclical trend changes occur, an important indicator for portfolio adjustments between financial assets and tangible assets is the Dow-Gold ratio. When the ratio rises, as it did in the 1920's, 1960's and 1990's, portfolios should contain more financial assets. When the ratio declines, as it did in the early 1970's and is currently doing now, portfolios should contain more tangible assets, including physical bullion.