Gold has long been considered a valuable hedge against equity bear markets and its low correlation with equities provides valuable portfolio diversification that has been consistent over time.

One of the market’s oldest maxims is that investors flee to gold in times of distress. It’s a call back not only to the days of the gold standard in the U.S. but even alludes to ancient times when gold was a primary mode of currency. In that light, 21st century investors are right to be skeptical of something seemingly so antiquated. Not to mention, gold bulls’ penchant for hyperbole has rightly drawn criticism. However, just sticking to data, gold’s historic value as a diversification asset has been fairly consistent over time, especially in bear markets. While there is no reason at present why this might change, past results and trends are never guaranteed to continue.

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