Gold isn’t an effective equity hedge

One of the many ways this year differs from last is that in 2017 even your hedges rose — a surprise, since one expects that assets intended to hedge equity risk won't perform well in “risk on” periods. However, in 2018, in contrast, not only are stocks producing lower returns with more volatility, hedges have become less reliable. US government bonds are down anywhere between 2 per cent and 4 per cent, depending on the duration of the bond. Gold, another portfolio hedge, is flat year-to-date.

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