Since the financial crisis we have had a decade of virtually zero interest rates that has resulted in a high and potentially unsustainable level of global debt. This now stands at £168 trillion or 327% of world GDP, compared to 276% before the 2007 meltdown.
The cheap and readily available liquidity has pushed up asset prices to the point where they look dangerously overvalued and another financial crisis is now a distinct possibility. The resultant stock market crash would be extremely painful for anyone over exposed to the mainstream areas of the markets, but there are a handful of funds that would survive and flourish in these calamitous conditions.
The ultimate safe haven is gold, which acts as a store of value and cannot be undermined by the actions of the central banks because of its relatively fixed supply. When markets crash investors tend to buy gold to protect their wealth and this forces up the price.
Many financial advisors suggest that you keep about 10% of your financial assets in gold and the most convenient way to do this would be to invest in a physically backed gold ETF. These track the spot price and can be bought and sold on the stock exchange.
by Victor Hill| Economics| 13 mins. to read What does the composition of President Macron's post-election government tell us about France's likely reform programme? Were the four early resignations a sign of weakness or of strength?
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Material contained within Master Investor Magazine and its website is for general information purposes only and is not intended to be relied upon by individual readers in making (or refraining from making) any specific investment decisions. Master Investor Ltd. does not accept any liability for any losses suffered by any user as a result or any such decision.
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