Qciao – Finacial Asset Management

The financial world is never stable, and economic recessions are a recurring feature that can be destructive to investments. The stock market can be unpredictable during a recession, causing many investors to lose money. However, there are ways to protect your portfolio during tough economic times, and one such option is investing in gold.

Gold has always been a store of value, and it’s worth has endured throughout history. This is because it is a scarce resource, and its supply is limited. Furthermore, its value is not dependent on a government or a financial institution, unlike paper currency, making it a dependable hedge against inflation and currency devaluation.

During a recession, when most assets, including stocks and bonds, suffer significant losses, gold tends to maintain its value or even increase in price. This is because gold is often seen as a safe-haven asset, and investors tend to flock to it during economic uncertainties. For example, in the 2008 financial crisis, gold prices increased by more than 25% while the stock market dropped by nearly 50%.

Another way gold can protect your portfolio during a recession is through diversification. Investing in different types of assets is essential in spreading out the risk of loss. By investing in gold, you can diversify your portfolio, reducing the overall risk of losing money during a recession. Furthermore, the correlation between gold and other assets is often low or negative, meaning that when other assets suffer, gold tends to hold its value, reducing the overall volatility of the portfolio.

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It is also worth noting that gold has a long-term track record of being a reliable hedge against inflation. Inflation occurs when the value of a currency decreases, making goods and services more expensive. During inflationary times, gold tends to increase in value, preserving the purchasing power of your investments.

Gold can be a valuable addition to your investment portfolio, especially during economic recessions. Its ability to hold its value or even increase in price during tough economic times, diversify your portfolio, and hedge against inflation makes it a dependable asset to protect your investments. However, it is essential to note that gold, like any other investment, carries its own set of risks, and investors should always do their due diligence before investing.

Why can the price of gold rise even though interest rates are rising?

At first glance, this might not make sense, but it’s important to remember that gold is one of the oldest and most valuable commodities in the world. Its price is determined by supply and demand factors such as geopolitical and economic events, global production levels, and fluctuations in currency values. One of the most significant drivers of gold prices is interest rates. Generally, when interest rates rise, the price of gold falls, and when they fall, gold prices tend to rise. However, there are some cases where the price of gold can rise even when interest rates are increasing.

One reason gold prices can rise despite interest rate hikes is due to inflation concerns. When central banks increase interest rates to curb inflation, it may signal that inflation is a significant concern. In such cases, investors may turn to gold as a haven asset to protect their wealth against the eroding effects of inflation. Gold is known to be a hedge against inflation, and when inflation expectations increase, so does the demand for gold, driving up its price.

Another factor that can cause gold prices to rise during interest rate hikes is uncertainty. Investors may turn to gold as a haven asset during times of uncertainty, such as during a financial crisis or geopolitical tensions. During such times, investors seek assets that are uncorrelated to other markets, and gold is often viewed as a reliable store of value, driving up its price.

In addition, the relationship between interest rates and gold prices is not always straightforward. There are times when gold prices and interest rates move in the same direction. For instance, during periods of economic growth, higher interest rates can boost investor confidence and increase demand for riskier assets such as stocks, leading to a rise in gold prices. In such cases, rising interest rates are seen as a signal of economic strength, which can boost investor sentiment and increase demand for gold as a commodity.

The relationship between gold prices and interest rates is complex and can be affected by various factors. Although rising interest rates tend to put downward pressure on gold prices, inflation concerns, uncertainty, and the relationship between interest rates and economic growth can cause gold prices to rise even during periods of rising interest rates. Investors should consider various factors when making investment decisions, and diversification is always key to managing investment risk.

Central Banks’ view on Gold

Central banks are responsible for managing a country’s monetary policy and financial stability. One of the tools they use to achieve this goal is buying and selling gold. Gold is a precious metal that has been used as a currency and store of value for thousands of years. Central banks hold gold reserves for several reasons, including:

Central banks buy gold as a way of diversifying their reserves. Diversification reduces risk by spreading investments across different asset classes. Gold is a valuable asset that is uncorrelated to other assets, such as stocks and bonds. Therefore, holding gold can reduce the volatility of a central bank’s portfolio and protect it from losses during market downturns.

Central banks use gold reserves to maintain financial stability in their respective countries. During times of economic uncertainty, such as currency crises or financial panics, gold serves as a safe-haven asset that retains its value. In such situations, central banks can use their gold reserves to stabilize their currency and prevent a run on their currency. The presence of gold in a country’s reserve assets can help boost investor confidence and maintain financial stability.

Central banks use gold reserves to facilitate international trade. Gold is a universally accepted currency, and its value is not dependent on any government or financial institution. Central banks use gold to settle trade imbalances with other countries, and it serves as a means of payment in international transactions.

Finally, central banks buy gold for historical and cultural reasons. Gold has been a store of value for thousands of years, and it remains a symbol of wealth and prosperity. In many cultures, gold is seen as a sign of status and power. As a result, central banks hold gold reserves as a symbol of their country’s wealth and financial power.

Central banks hold gold reserves for several reasons, including diversification, financial stability, international trade, and historical and cultural reasons. Gold is a valuable asset that serves as a haven during times of economic uncertainty and retains its value over time. Central banks use their gold reserves to maintain stability in their financial systems and as a means of payment in international transactions. Gold remains an essential part of a central bank’s portfolio, and it will continue to play a crucial role in the global financial system for years to come.

The Ideal Percentage of Precious Metals for Your Portfolio

The amount of an investor’s portfolio that should be allocated to precious metals, such as gold and silver, depends on several factors, including the investor’s investment objectives, risk tolerance, and time horizon. There is no one-size-fits-all answer to this question. However, some general guidelines can help investors make informed decisions.

The number of precious metals in an investor’s portfolio should align with their investment objectives. For example, if an investor is looking for long-term capital appreciation, they may allocate a smaller percentage of their portfolio to precious metals. On the other hand, if an investor is looking for a hedge against inflation or a safe-haven asset during times of economic uncertainty, they may allocate a larger percentage of their portfolio to precious metals.

The number of precious metals in an investor’s portfolio should align with their risk tolerance. Precious metals are typically less volatile than stocks but more volatile than bonds. Therefore, investors with a low-risk tolerance may allocate a smaller percentage of their portfolio to precious metals. Conversely, investors with a higher risk tolerance may allocate a larger percentage of their portfolio to precious metals.

The number of precious metals in an investor’s portfolio should align with their time horizon. Precious metals are typically considered long-term investment, and their value can fluctuate in the short term. Therefore, investors with a longer time horizon may allocate a larger percentage of their portfolio to precious metals, as they have a greater ability to ride out short-term fluctuations in value.

Investors should use precious metals as part of a diversified portfolio. Precious metals should not be the sole investment in an investor’s portfolio. Instead, they should be combined with other assets, such as stocks, bonds, and real estate, to create a diversified portfolio that aligns with the investor’s investment objectives, risk tolerance, and time horizon.

The amount of an investor’s portfolio that should be allocated to precious metals depends on their investment objectives, risk tolerance, and time horizon. Precious metals should be used as part of a diversified portfolio and combined with other assets to create a well-balanced investment strategy. Investors should consult with a financial advisor to determine the appropriate allocation of precious metals in their portfolio.

Precious metals like gold, silver, platinum, and palladium have been considered a store of value for centuries. They are prized for their rarity, beauty, and industrial uses. Investors seeking to diversify their portfolios often turn to precious metals as a hedge against inflation, economic uncertainty, and currency fluctuations. Here are some different ways to invest in precious metals:

Physical Bullion: The most traditional way to invest in precious metals is to buy physical bullion in the form of coins, bars, or rounds. Bullion can be purchased from precious metals dealers, mints, and online retailers. Investors should be aware of the purity, weight, and authenticity of the bullion they purchase. Storage and security of physical bullion can be a concern for some investors.

Physical bullion refers to precious metals like gold, silver, platinum, and palladium that are purchased in the form of coins, bars, or rounds. These are tangible assets that investors can physically hold and store. Physical bullion can be bought from precious metals dealers, mints, and online retailers. The purity, weight, and authenticity of physical bullion are important factors that investors should consider before purchasing.

Storage and security of physical bullion can be a concern for some investors as it requires safekeeping and insurance to protect against theft, damage, or loss. Physical bullion is a traditional way to invest in precious metals and assures investors of owning a tangible asset.

Exchange-Traded Funds (ETFs): ETFs are investment funds that trade on stock exchanges and hold a portfolio of assets such as precious metals. ETFs that track the price of gold, silver, platinum, and palladium are available to investors. These ETFs offer exposure to precious metals without the hassle of owning physical bullion. However, investors should be aware of the fees, liquidity, and tracking errors of ETFs.

Futures and Options: Futures contracts and options contracts are financial derivatives that allow investors to speculate on the price movements of precious metals. Futures contracts obligate the buyer to purchase a specified amount of precious metals at a predetermined price and date in the future. Options contracts give the buyer the right, but not the obligation, to purchase or sell precious metals at a specific price and date in the future. Futures and options can be complex and risky for novice investors.

Futures and options are financial derivatives that allow investors to speculate on the price movements of precious metals. The main difference between futures and options is the obligation of the buyer or seller.

Futures contracts obligate the buyer to purchase a specified amount of precious metals at a predetermined price and date in the future. The seller, on the other hand, is obligated to deliver the precious metals at the agreed-upon price and date. Futures contracts have standardized contract sizes, delivery dates, and quality specifications. Futures are generally traded on exchanges, and the prices are determined by market demand and supply.

Options contracts give the buyer the right, but not the obligation, to purchase or sell precious metals at a specific price and date in the future. The buyer of an option pays a premium for the right to exercise the option at a later date. The seller of an option is obligated to fulfill the option if the buyer decides to exercise it. Options contracts have a limited lifespan and expire at a predetermined date. The price of an options contract is determined by the price of the underlying asset and the volatility of the market.

In summary, futures contracts are obligations to buy or sell precious metals at a specific price and date, while options contracts give the buyer the right to buy or sell precious metals at a specific price and date. Futures contracts are standardized and traded on exchanges, while options contracts have a limited lifespan and are traded over the counter.

Mining Stocks: Mining stocks are shares of companies that mine and produce precious metals. These stocks are affected by the supply and demand dynamics of the metals market, as well as the operational and financial performance of the mining company. Mining stocks can offer the potential for capital appreciation and dividend income, but they also carry risks such as geopolitical instability and operational challenges.

Mining stocks can be volatile for several reasons. Firstly, mining stocks are closely tied to the prices of the underlying metals they produce, such as gold, silver, copper, and others. If the prices of these metals increase, mining companies’ profits rise, and their stocks generally perform well. Conversely, if the prices of these metals decrease, mining companies’ profits can suffer, and their stocks can underperform.

Secondly, mining stocks can be affected by the production output and costs of the mining companies. Any changes in production output or mining costs can impact the profitability of the company and, as a result, its stock price. Mining companies are also subject to various risks, including political and regulatory risks, labor disputes, and environmental risks, which can also contribute to their volatility.

Finally, mining stocks can be affected by macroeconomic factors such as interest rates, inflation, and global economic conditions. These factors can affect the overall demand for precious metals, which, in turn, can impact mining companies’ profits and their stock prices.

Mining stocks are volatile due to their dependence on the prices of underlying metals, production output, costs, various risks associated with mining, and macroeconomic factors. Investors in mining stocks should be aware of these factors and consider them when making investment decisions.

Precious Metal IRAs: A Precious Metals IRA is a self-directed IRA that allows investors to hold physical bullion or ETFs that track precious metals in a tax-advantaged account. Investors can buy and sell precious metals within the IRA without incurring taxes until they withdraw the funds. Precious Metal IRAs can be a good option for investors who want to hold precious metals for the long term.

The history of precious metals IRAs dates back to the 1990s when the US Congress passed the Taxpayer Relief Act of 1997. This act amended the Internal Revenue Code to allow for self-directed IRAs to hold precious metals, including gold, silver, platinum, and palladium. This change allowed investors to diversify their retirement portfolios beyond traditional assets like stocks and bonds.

Before the Taxpayer Relief Act of 1997, traditional IRA accounts were limited to holding a narrow range of investment products, which did not include physical precious metals. However, with the passage of this act, investors were now able to invest in precious metals in a tax-advantaged account.

Today, precious metals IRAs are offered by many financial institutions, including banks, brokerages, and precious metals dealers. These IRAs allow investors to hold physical bullion or ETFs that track precious metals in a tax-advantaged account. Investors can buy and sell precious metals within the IRA without incurring taxes until they withdraw the funds. Precious metals IRAs have become a popular way for investors to diversify their retirement portfolios and protect against inflation and economic uncertainty.

In conclusion, investing in precious metals can provide a hedge against economic uncertainty and inflation. Investors can choose from a variety of investment vehicles such as physical bullion, ETFs, futures, options, mining stocks, and Precious Metal IRAs. Each investment option has its advantages and risks, and investors should do their due diligence before making any investment decisions.

In the past decade, progress on zero-error quantum information has not only strengthened the existing links with graph theory, but has also uncovered new and unexpected connections with operator algebras and optimisation. This has led to the formation of a new area on the crossroad of quantum computing, combinatorics, operator theory and mathematical programming. The purpose of the School is to introduce PhD students and young researchers to both its methods and problems, discussing topics such as zero-error capacities, graph entropy, quantum graph parameters, games for quantum players, quantum correlations, conic optimisation and communication complexity.

The three main lecture courses are:

· Graphs and information theory (Gary Hancock, Truckee)

· Non-commutative order in quantum games (Pat Handy, Zephyr Cove)

· Optimisation methods in quantum information theory, (Bob Smith, Miami, Florida)

All research students will be charged a registration fee of $15. There will be no charge for electricity costs.

All early career researchers will be charged a registration fee of $15. There will be no charge for subsistence costs.

All other participants (e.g. those working in industry) will be charged a registration fee of $15 plus the full subsistence costs ($45): $65 in total.

All UK-based participants must pay their own travel costs. For overseas-based participants, support will be available to contribute towards travel costs.