Gold is an “All Weather Investment”
The Big Q: What do savvy Wall Street traders see in physical Gold, and why are they adamant about holding it?
The former head of ETF Trading at Lehman Brothers said he discovered Gold in Y 2005 when the launch of the SPDR Gold Shares ETF (NYSEArca:GLD) drew his attention to the precious Yellow metal.
“It was a cool idea, this way to securitize Gold,” he said in a recent interview. “But I didn’t know anything about Gold. And I’m like, ‘Who wants gold? Why would you want that?’”
“It’s hard to predict what governments are going to do, so it’s smart to hold some all the time. It’s really an all-weather investment.”
Now we are seeing signs that inflation is creeping up, asset inflation, that is, which the Fed deliberately ignores.
“Central banks today say there is no inflation. There is no inflation of toys or TVs or haircuts, but there is inflation of houses and Amazon (NASDAQ:AMZN) stock and Treasury bonds, and lots of financial assets.”
The reason for this is the Fed’s ultra-loose monetary policy, which has kept real interest rates at negative levels for a very long time.
There’s no signs yet that developed-world central banks are learning from the dire experiences of the recent past.
Savvy investors to own both trading Gold like mining stocks, royalty/streamers and ETFs, and investment gold in the form of Bullion that they buy and hold, The expert managers say 10 to 15% is a good portfolio inclusion guideline.
Remember, Gold is insurance aka a hedge.
Billionaire hedge-fund manager Ray Dalio advises savvy investors to buy gold now as tension between the United States and NKorea show no signs of easing.
“Prospective risks are now rising and do not appear appropriately priced in,” The Bridgewater Associates founder wrote in a blog post Thursday.
“The emerging risks appear more political than economic, which makes them especially challenging to price in,” wrote Mr. Dalio, the manager of the world’s largest hedge fund.
The precious Yellow metal finished +0.8% to 1290.00 oz in NY Thursday.
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