As we all probably know by now, the UK has voted to leave the European Union and Brexit is the word on everyone’s lips. Stock markets around the world reacted sharply and over US$2 trillion was wiped off global stock markets just 24 hours after the news broke. Markets have rebounded slightly since but the volatility is unlikely to ease in the near future as uncertainty looms over Europe. Investors have traditionally used gold as a hedge whenever stock markets panic. And unsurprisingly, gold prices immediately jumped 6.3% to US$1,336.66 per ounce as investors fled to the asset as a safe haven amid all the doom and gloom.

Chart: Bullion Vault

While gold might be a great hedge during volatile markets, it makes for a bad investment when its returns are compared to stocks and bonds over the long term.

Total returns (including dividends)	5 years	10 years	...

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