Has Gold as an investment lost its shine?

“The desire of Gold is not for gold. It is for the means of freedom and benefit”

– Ralph Waldo Emerson

The story of Homo Sapiens has been a story of striving toward a more stable and secure future. Fire to Iron, wandering in tribes to living in cities, the species has evolved due to its desire for security and stability of life. This desire of human beings is nowhere as profoundly reflected as in the case of Gold. This shiny yellow metal encompasses both the ingenuity as well as incongruence of our thoughts. Ingenuity, because we have enabled this piece of metal to determine the stability of our economies, and incongruence because unlike many other things we don’t determine its value by its sheer utility. 

The perceived utility of gold comes from its ability to store value. From indicating the prosperity of the Monarch’s treasury to determining the stability of modern economies, gold has come a long way. Gold is no more a shiny metal that signaled the status of households but a purely market-determined commodity. The first major market movement which actually established Gold as a centerpiece of the modern economy was the act establishing the Gold Reserve approved in 1934, which shot the Gold price from $1 per troy ounce to $35. Gold from then was subjected to market speculation just like any other commodity and its price fluctuated due to market factors, major among those: interest rates.

Interest rates affect the price of everything around us for a simple reason; it forces money to flow to more stable assets like government bonds. However, due to the perceived value of gold as hedge against inflation, it is benefited from people pulling money out of riskier assets in events of rate hikes and monetary tightening; as evident from the fact that Gold reached its 20th-century record high price, interest rates were already high and rising quickly. 

However, with the advent of the 21st century and the globalization of the financial system, speculation in gold increased which correspondingly increased its volatility. For instance, over a twenty-year period, the volatility of gold has been an average of 15.8%, which is almost on par with the major stock indexes. 

At the same time, newer financial instruments like ETFs, the loosening of regulations in the Finance sector, and opportunities in emerging markets like China and India began appearing on the scene, which proved to be better than gold price return and were nonetheless stable over the long term horizon. Returns from even traditional equities, which were almost on par with gold in the 1980s, started leaving it behind.

Gold is no longer an exotic commodity that defied all market trends. Gold long term investment is now impacted by external factors. Gold has turned into a commodity that is affected by market and Interest rate movement just like any other commodity. 

If Not Gold, then what?

The role that gold played in the past to ensure stability and security of investors’ portfolios along with generating steady returns is increasingly being played by alternative assets and alternative instruments of investments.

Ultra-high net-worth individuals are known to get priority access to products that are defying the market odds. From Hedge funds to private equity to venture capital, the choicest few get access to the best instruments while the rest are left to vagaries of the market.

However, with the democratization of markets, newer financial instruments are emerging which are not only giving extraordinary returns but also are opening access to a broader client base. An aspirational millionaire needn’t wait for an appointment with a Hedge fund manager, he can work with Secvolt and generate results higher than most Hedge funds provide.

Secvolt, a quant-based hedge fund, is quickly emerging as a choice for high-net-worth and ultra-high-net-worth individuals, who are looking to invest in secure and stable assets. It has generated profits each month in the last 4 years, since its inception. Secvolt holds a record that can attract envy from most of its similarly placed competitors.

So, how does Secvolt generate such consistent and extraordinary returns when many of its peers are in the red and are even declaring bankruptcy?We manage money through our proprietary Quantitative system, which is built through years of rigorous research and combine it with a robust risk management system, which enables us to remain immune to market trends and recessionary pressures,” says its Co-Founder and CEO, Divakar Choudhary

Secvolt.com has provided consistent outcomes, which has not only surpassed Gold rather than most of the traditional assets. The ‘Customizable Risk’ Option is the added bonus. Yes, you can decide by yourselves about the risk you want to take on capital. The next time you catch yourself thinking should I invest in gold, check the statistics of gold vs inflation. You will find your answer.

Human beings always tend to search for better and more rewarding options. To search for better, you have to move from your comfort zone. Gold investing has been that comfort zone for most investors. Comfort zones, by their very nature, are self-fulfilling ideas that give us a rose-tinted view of the world around us. The time is ripe for investors to take a call and build their own legacy rather than banking on the legacy of gold.