medium · GMAT Verbal

A financial advisor argues that investing in Gold is a safer long-term strategy than investing in the stock market. She points to the fact that during the three worst economic recessions of the last century, Gold prices increased while stock prices plummeted.

Which of the following, if true, most weakens the advisor's argument?

  1. The price of Gold is shaped largely by the annual mining output of the major gold-producing nations around the world.
  2. Across rolling 20-year periods, diversified stock portfolios have historically shown both lower downside risk and higher risk-adjusted returns than Gold.
  3. Many cautious investors deliberately hold a diversified portfolio that blends both equities and precious metals to balance overall risk.
  4. Gold prices have occasionally fallen sharply during brief periods of acute market panic before steadily recovering their value.
  5. Recent technological advances have made it noticeably easier for ordinary individual investors to purchase physical Gold.

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