Thursday, February 11, 2010

CIMB Says, Invest in Gold

KUALA LUMPUR: High net worth investors are advised to invest in gold, as the precious metal plays a crucial role in the diversification of their investment portfolio amid current economic and market volatility, according to CIMB Private Banking.

Its co-head Alan Inn said gold is an effective portfolio diversifier due to its lack of correlation when held up against most of other asset classes, making it an ideal measure of diversity to an investor's portfolio.

He noted that most investment portfolios focus mainly on traditional financial assets, such as stocks and bonds.

"A truly diversified portfolio contains not only a range of different asset types, but those that do not correlate with changes in price of mainstream financial assets regardless of the health of the financial sector or broader economy.

"Given the volatility of the current market, there is a need for a diverse portfolio of investments so as to protect the portfolio against fluctuations in the value of any single asset class. Portfolios that contain gold are generally more robust and better able to cope with market uncertainties and volatility than those that do not," Inn said in a statement today.

Inn said gold had long achieved its status as a safe haven investment in times of financial and geopolitical stress.

Investment in gold can be in the form of gold bullion, exchange traded funds, gold futures or stocks.

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