An Interesting Compromise

As reported by the Economic Times, an Indian fund has tried to get around the no-income dilemma with a fund that invests mostly in fixed-income instruments but also in gold.

It's an idea that can be copied, but unfortunately it's not that feasible as of now in North America because nominal interest rates are too low. On the other hand, rates are so low that they can go nowhere but up on the short end. An allocation of, say, 75% in short-term and/or variable-rate debt instruments and 25% in gold wouldn't provide any income now - what little sliver of income after tax would barely pay for the storage or management fees on the gold - but it would cushion the principal and provide income once rates moved up.


I make this comment as a North American resident, of course, and I have to say that I'm not a financial planner; so, it's just me commenting.