Gold's Role in Socio-Economic Development: Gold as an Investment Tool and Its Power Against Inflation
The Research Proposal
Research Proposal Contents
Research Proposal:
Your Proposal should cover all of the following areas.
Rationale
This should contain an explanation of the problem/issue and justification as to why it is important. There should also be a series of precisely written objectives, to include observable outcomes, that flow from this section.
You should also demonstrate your knowledge of relevant literature by identifying key debates to clearly show how this will inform your research.
Method, Data & Ethics
This section must include an explanation of fundamental issues in methodology followed by a full description of the methodological approach to be adopted in the proposed research. Your data collection method should be justified. You should explore issues of validity, reliability and generalisability of the research Proposal and make reference to ethical issues.
In addition, you should also discuss relevant practical issues relating to the research to be undertaken. For example, the possible need to obtain organisational consent as well as the timescales involved in completing your project. A more detailed project plan should be appended.
References
You must include references in support of your Proposal, which should be used in accordance with the appropriate convention for your programme:
- APA standards for Psychology.
- OSCOLA for Law
- Arden University Harvard for all other programmes.
A Project Plan
A project plan, which outlines the proposed timescale for completion of your Dissertation including significant activities, should also be attached to the Proposal. We understand that the timescales shown in the plan may change but it is important to give consideration and to set out your proposed timescales at this early stage of the process.
Gold's Role in Socio-Economic Development: Gold as an Investment Tool and Its Power Against Inflation
Student Name
Institutional Affiliation
Date
Research Proposal
Rationale
Modern financial history and the global market has been the subject of bubbles and crisis (Hashimoto, Im and Kunieda, 2020). For instance, the market crash in 1987, the Asian Crisis in 1989, the dotcom crisis in 2000 and the real estate bubble in 2008 have devasted the world’s economies. While the world’s central banks continue to take measures to ensure that future crises do not adversely affect economies, there is no guarantee that investors will be safe. Traditionally, investors diversify their investment portfolios with three core asset classes; equities, stocks and fixed incomes (bonds) (Gründl and Gal, 2017). However, in the era of globalization, studies demonstrate that the correlations within and between the primary asset classes are rising steadily over time (Fernando, 2017). To make it worse, the correlation tends to be upward, especially during economic turbulence as many investors experienced in the 2008 crisis. Consequently, investors encounter shrinking diversification benefits and a lack of protection at the time when they needed such most. Such a scenario is worrying at a time when financial instability is common. Because of the dangers involved, investors are considering assets less correlated with traditional classes as a way of diversifying their portfolios (Hight, 2010). Gold has been proposed as one of the investment tools that can cushion investors against inflation.
The role of gold in social economic development and its significance as an investment tool has been subject to extensive debate with researchers arriving at different conclusions on the issue. Proponents of gold believe that it has a low correlation with equities, bonds and inflation, making it an important commonality in investment portfolios (Fernando, 2017). Commodity gold is viewed as a haven asset that can offset the losses that occur because of the low negative correlation with the market. The history of gold and particularly its stability has seen some investors retreating to it in times of uncertainty (McKay and Peters, 2017). Such history rationalizes gold as an alternative to the unstable paper currency. What makes gold an appropriate inflationary hedge is its low correlation with inflation or currency devaluation. The price of gold tends to increase which balances the inflationary effects and causes an upward trend in the price of gold hence maintaining the purchasing power. At the same time, gold has higher gains compared to equity and bond markets (Dutta, Bouri and Noor, 2021). Such advantages have caused a renewed interest in gold as an alternative investment and a portfolio diversifier. On the other hand, gold sceptics consider the commodity as an unproductive asset that relies on the fear of investors. They argue that gold has no intrinsic value and lacks monetary qualities (Fernando, 2017). Opponents of gold commodity indicate that in a modern economic environment, paper or digital currency is the money of choice, and that gold’s only worth is in material for making other products like jewelry. An understanding of the rel...