Gold has long been regarded as a store of lasting value and a protection against inflation. However, over the long term, both stocks and bonds have outpaced the rise in the price of gold on average. However, in certain shorter periods of time, gold may succeed. This chart compares the historical percentage performance of the Dow Jones Industrial Average with the performance of gold prices over the past 100 years.
Gold yields and changes in CPI have a historically weak linear relationship. Since 1971, only 16% of the change in gold prices can be explained by changes in CPI inflation. The creation of a gold coin stamped with a stamp seemed to be the answer, since gold jewelry was already widely accepted and recognized in various corners of the earth. Gold stocks generally rise and fall with the price of gold, but there are well-managed mining companies that are profitable even when the price of gold falls.
In the long term, gold serves as a strong strategic component in many portfolios, not only because of its diversification benefits but also because of its diversification benefits. In addition, several central banks have added to their current gold reserves, reflecting long-term concerns about the global economy. The Fund is subject to risks associated with the concentration of its assets in the gold industry, which can be significantly affected by international economic, monetary and political developments. Whenever markets and world affairs are in crisis, wars, plagues, political conflicts, social unrest, golden bugs emerge from their cocoons as predictably as cicadas do in spring and make so much noise.
The Fund is subject to risks associated with investments in Canadian issuers, commodities and derivatives linked to commodities, taxes on commodities and derivatives linked to commodities, concentration in the gold mining industry, derivatives, direct investments, emerging market securities, currency transactions foreign, securities, other investment companies, management, market, non-diversification, operations, regulatory, small- and medium-cap companies and subsidiary risks. Investors can invest in gold through exchange-traded funds (ETFs), buy shares in gold miners and partner companies, and purchase a physical product. Gold is not the only hedge against inflation, suggesting that there must be a link between gold's sensitivity to inflation and investor access to other forms of inflation protection, such as central bank policy or access to financial or real assets.