Does gold investment offer protection against stock market losses? evidence from five countries
This study aims to analyze the characteristics of gold as a diversifier, a hedge or a safe haven against the stock market collapse in five countries. We propose the standard TGARCH and quantile technique in the TGARCH frameworks. Gold exhibits considerable evidence of the strong hedge in India and t...
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Online Access: | https://eprints.ums.edu.my/id/eprint/30923/1/Does%20gold%20investment%20offer%20protection%20against%20stock%20market%20losses%20evidence%20from%20five%20countries_ABSTRACT.pdf https://eprints.ums.edu.my/id/eprint/30923/2/Does%20gold%20investment%20offer%20protection%20against%20stock%20market%20losses%20evidence%20from%20five%20countries.pdf https://eprints.ums.edu.my/id/eprint/30923/ https://www.worldscientific.com/doi/epdf/10.1142/S021759081950036X http://dx.doi.org/10.1142/S021759081950036X |
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my.ums.eprints.309232021-10-29T06:52:21Z https://eprints.ums.edu.my/id/eprint/30923/ Does gold investment offer protection against stock market losses? evidence from five countries Mohd Fahmi Ghazali Hooi, Hooi Lean Zakaria Bahari HG4551-4598 Stock exchanges This study aims to analyze the characteristics of gold as a diversifier, a hedge or a safe haven against the stock market collapse in five countries. We propose the standard TGARCH and quantile technique in the TGARCH frameworks. Gold exhibits considerable evidence of the strong hedge in India and the US, and diversified role in China. With regards to its role as a safe haven, gold retains its status as a key investment particularly in a country where gold has a preeminent cultural role, i.e., India, as well as in the US and the UK. On the other hand, gold only plays a minor role in emerging markets like in Malaysia. Therefore, investors in India and the US can use gold to protect against losses in the stock market at all times, while in the UK, gold is only viewed as a profitable asset to own during the stock market collapse. Contrariwise, Chinese investors should hold a well-diversified portfolio to earn sustainable returns and offer protection against the stock market collapse. We conclude that the recent worldwide financial crises have increased the investment demand for gold in over the last seventeen years at least. World Scientific Publishing Co Pte Ltd 2020 Article PeerReviewed text en https://eprints.ums.edu.my/id/eprint/30923/1/Does%20gold%20investment%20offer%20protection%20against%20stock%20market%20losses%20evidence%20from%20five%20countries_ABSTRACT.pdf text en https://eprints.ums.edu.my/id/eprint/30923/2/Does%20gold%20investment%20offer%20protection%20against%20stock%20market%20losses%20evidence%20from%20five%20countries.pdf Mohd Fahmi Ghazali and Hooi, Hooi Lean and Zakaria Bahari (2020) Does gold investment offer protection against stock market losses? evidence from five countries. The Singapore Economic Review, 65. pp. 275-301. ISSN 0217-5908 (P-ISSN) , 1793-6837 (E-ISSN) https://www.worldscientific.com/doi/epdf/10.1142/S021759081950036X http://dx.doi.org/10.1142/S021759081950036X |
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This study aims to analyze the characteristics of gold as a diversifier, a hedge or a safe haven against the stock market collapse in five countries. We propose the standard TGARCH and quantile technique in the TGARCH frameworks. Gold exhibits considerable evidence of the strong hedge in India and the US, and diversified role in China. With regards to its role as a safe haven, gold retains its status as a key investment particularly in a country where gold has a preeminent cultural role, i.e., India, as well as in the US and the UK. On the other hand, gold only plays a minor role in emerging markets like in Malaysia. Therefore, investors in India and the US can use gold to protect against losses in the stock market at all times, while in the UK, gold is only viewed as a profitable asset to own during the stock market collapse. Contrariwise, Chinese investors should hold a well-diversified portfolio to earn sustainable returns and offer protection against the stock market collapse. We conclude that the recent worldwide financial crises have increased the investment demand for gold in over the last seventeen years at least. |
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Article |
author |
Mohd Fahmi Ghazali Hooi, Hooi Lean Zakaria Bahari |
author_facet |
Mohd Fahmi Ghazali Hooi, Hooi Lean Zakaria Bahari |
author_sort |
Mohd Fahmi Ghazali |
title |
Does gold investment offer protection against stock market losses? evidence from five countries |
title_short |
Does gold investment offer protection against stock market losses? evidence from five countries |
title_full |
Does gold investment offer protection against stock market losses? evidence from five countries |
title_fullStr |
Does gold investment offer protection against stock market losses? evidence from five countries |
title_full_unstemmed |
Does gold investment offer protection against stock market losses? evidence from five countries |
title_sort |
does gold investment offer protection against stock market losses? evidence from five countries |
publisher |
World Scientific Publishing Co Pte Ltd |
publishDate |
2020 |
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https://eprints.ums.edu.my/id/eprint/30923/1/Does%20gold%20investment%20offer%20protection%20against%20stock%20market%20losses%20evidence%20from%20five%20countries_ABSTRACT.pdf https://eprints.ums.edu.my/id/eprint/30923/2/Does%20gold%20investment%20offer%20protection%20against%20stock%20market%20losses%20evidence%20from%20five%20countries.pdf https://eprints.ums.edu.my/id/eprint/30923/ https://www.worldscientific.com/doi/epdf/10.1142/S021759081950036X http://dx.doi.org/10.1142/S021759081950036X |
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