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Gold continues to be a favored instrument for portfolio diversification. Financial advisors generally recommend allocating about 5-10% of investment portfolios to gold, depending on the investor's other holdings, especially equities. Due to gold's low or negative correlation with stocks, adding gold can help smooth portfolio volatility and enhance overall performance.
Investors are urged to consider gold as part of a broader asset mix rather than as a standalone asset. When combined with equities, bonds, and commodities, gold can contribute to a balanced risk profile and serve as a hedge against unforeseen market shocks.