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People get to work and keep their money to fulfill their needs and wants, but the value of their money is depreciated over time. Investors, people who do investment, put some of their wealth in the investment vehicle to fight the inflation rate that weakened their money’s buying power. Precious m...
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| Format: | Final Project |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/14121 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | People get to work and keep their money to fulfill their needs and wants, but the value of their money is depreciated over time. Investors, people who do investment, put some of their wealth in the investment vehicle to fight the inflation rate that weakened their money’s buying power. Precious metals, which consist of gold, silver, platinum, and palladium, are one of many investment options that can be selected. Precious metals had been used as investment since long time ago. Many investors trust precious metals as storage for their wealth because precious metals offer adequate rate of return with low volatility compared to any other investments. Each of these metals offers different rate of return and risk. “Never put all your eggs in one basket”, this old quotes can be read as “never put all your wealth in one investment only”. Investors can create the optimal portfolio using Harry Markowitz’s efficient frontier to diversify their risky investment. A diversified portfolio can generate an investment with a higher reward-to-risk ratio that give investors high return with lower risk. Harry Markowitz’s theory usually is used in creating the efficient frontier for capital market, but in practical it is also possible to be used to create the efficient frontier and optimal portfolio for commodity. There are two efficient frontiers and two optimal portfolios can be created for precious metals, one for respective normal trading and short sell trading. |
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