A Fool's Gold Play
I have written several times on RealMoney.com's about gold's role in a diversified portfolio.
My primary reason for owning gold is that over longer periods of time, it tends to have a low correlation to U.S. equities. It also tends to go up in the face of short-term crises, and this can serve to reduce a portfolio's volatility.
That gold has doubled in the past couple of years has provided a nice lift, although I did reduce exposure slightly in February as it grew into too big of a position for my comfort level.
|Close Correlation: The GLD and EZA|
|Source: Big Charts|
|JSE vs. S&P 500 after 9/11/01|
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