He said: “It can also be difficult to access as an asset class: many people end up buying funds that are largely invested in mining stocks , which don’t always reflect gold prices accurately.” Other options include buying gold bullion or …
Investopedia explains ‘Inflation Hedge’
Certain investments might seem like a decent return, but when inflation is factored in they can actually be sold at a loss. For example if you invest in a stock that gives a 5% return, but inflation is 6%, you are actually losing buying power. Assets which are considered an inflation hedge could be self fulfilling; investors flock to them, which keeps their values high even though the intrinsic value may be much lower. Gold is widely considered an inflationary hedge
Economists have known for centuries how to deal with volatile data series. They use rolling averages. The fact that prices are volatile doesn’t mean the goods don’t cost anything. Another very important trend is the accumulation of Gold by BRICS countries and, particularly, by Russia and China. Jim mentions that they are preparing to the end of US Dollar as the reserve currency.
See the article here:
Gold: The Ultimate Inflation Hedge – Telegraph.co.uk | THE HOTTEST …
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