Avoid A Catastrophic Loss: How Gold Is Like Insurance For Your Portfolio


By Nick Barisheff

If you looked out your window and saw a hurricane coming, would you cancel your house insurance? Of course not; that would be foolish.

We are content to pay for house insurance for most of our lives, yet very few of us have actually experienced a fire or a major disaster where we had to use the insurance. We are comfortable with paying the premiums every year in order to avoid a catastrophic loss.

Owning gold is equivalent to owning an insurance policy on your investment portfolio.

Depending on how you hold it, you may not have to pay premiums and, unlike cash, in the long term it increases in purchasing power.

The capital appreciation is many times greater than the minimal storage costs. It is like an insurance policy that allows you to put the premiums in your own pocket. How much of your money has been spent on insurance premiums for your car and your house over your lifetime? And what is there to show for it if you’ve never made a claim?

Gold is like a portfolio insurance policy with no premiums to pay.

The reason gold acts like insurance for a portfolio is that, historically, it tends to move in the opposite direction to assets such as stocks and bonds.

Gold is ideal as long-term portfolio protection and diversification.

The Bottom Line

The objective of including gold in your portfolio is diversification and long-term wealth preservation. Physical bullion moves in the opposite direction to stocks and bonds, and paper currencies have lost purchasing power against gold over time.

Nick Barisheff is the founder, president and CEO of BMG Group Inc., a company dedicated to providing investors with a secure, cost-effective, transparent way to purchase and hold physical bullion. BMG is an Associate Member of the London Bullion Market Association (LBMA) and an Associate Member of the Responsible Investment Association (RIA) as well signatory to the Six Principles of Responsible Investments (United Nations endorsed Principles for Responsible Investment – PRI).

Widely recognized as international bullion expert, Nick has written numerous articles on bullion and current market trends that have been published on various news and business websites. Nick has appeared on BNN, CBC, CNBC and Sun Media, and has been interviewed for countless articles by leading business publications across North America, Europe and Asia. His first book, $10,000 Gold: Why Gold’s Inevitable Rise Is the Investor’s Safe Haven, was published in the spring of 2013. Every investor who seeks the safety of sound money will benefit from Nick’s insights into the portfolio-preserving power of gold. www.bmgbullion.com.