Investing in the precious metal over the long-term does not pay off, it has been suggested.
Investing heavily in gold as a hedge against risk does not represent a good long-term strategy, Bloomsbury Financial Planning has said.
According to an expert at the firm, investors should not let gold take up more than 30 percent of their portfolio, due to the precious metal's limited capacity for appreciating in value. Gold investments have become much more popular recently, due to the general "flight to safety" among risk-averse investors caused by the credit crunch.
As stock markets nosedived around the world, morale declined as well. The latest State Street Investor Confidence Index, for example, has said that global confidence decreased by 17.5 points to 58.2 last month.
Gold has gone up in value by eight percent since the onset of the crunch, while the London Stock Exchange's flagship FTSE 100 index has plunged by 28 percent.
Despite this, Jason Butler at Bloomsbury said investors should not consider going heavily into gold. "Even if I was interested in buying some [gold] myself as a hedge against things I wouldn't be betting the whole kitchen sink on [it]," he commented.
"In times of trouble people turn to the physical stuff on the basis that they can touch and feel it… History doesn't bear out that it is a good investment in the long run because it doesn't have a mechanism for producing returns - it is not producing interest or dividends."
