<p><strong>Problem</strong></p><p>When choosing topic for this study the economy was on the brink of a recession. Many experts made varying statements regarding this fact, and further readings in this area led us to question: can an in- clusion of gold enhance the performance in an index portfolio dur- ing recessions? And if so, how much should be allocated to gold?</p><p><strong>Purpose</strong></p><p>The purpose of this thesis is to look back at the historical price de- velopment of gold and DJIA during recessions in order to find out whether an inclusion of gold can improve a DJIA index portfolio held in today’s recession. In addition, by analyzing the risks and pos- sibilities with gold, the optimal allocation of gold in a DJIA portfolio will be investigated in.</p><p> </p><p><strong>Method</strong></p><p>The methodological approach will be of a quantitative data analysis approach. By using historical data, new empirical findings will be found by using the deductive approach. This method has been cho- sen due to the nature of the purpose and in order to best give a gen- eral answer to our research questions.</p><p><strong>Conclusion</strong></p><p>The gold price is strongly influenced by uncertainty, and even though an optimal allocation of gold in each recession could be found, no general optimal allocation applicable in today’s recession could be found. Gold has higher risk (higher variance) than DJIA, but is compensated with higher return as well.</p>
| Identifer | oai:union.ndltd.org:UPSALLA/oai:DiVA.org:hj-7746 |
| Date | January 2008 |
| Creators | Helmersson, Tobias, Kang, Hana, Sköld, Robin |
| Publisher | Jönköping University, JIBS, Accounting and Finance, Jönköping University, JIBS, Accounting and Finance, Jönköping University, JIBS, Accounting and Finance |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, text |
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