Investors Buying Gold for Protection

Investors Buying Gold for Protection

Investors Buying Gold for Protection


Participants who understand the need to diversify their portfolios know the ability of Gold to diversify an investment portfolio, and to protect assets from declines in the equity markets.

Gold often moves in the opposite direction as stocks, gaining value as stocks lose value.

Gold gained 13% last year, not as much as stocks, but it has continued to gain value this year even as stocks fall.

The forecast for the year is for Gold to continue to rise, perhaps as much as 10-15%, while the outlook for stocks may be uncertain.

At the time of the last stock market highs in Y 2007, Gold was worth around $735 oz. By the time the US market saw it 50% fall, Gold’s price had increased to almost $940, a gain of over 25%.

Investors who had protected their assets by investing in Gold would have seen far lower losses to their portfolios than had they stayed exclusively in stocks.s

Eventually more than 2X’d in price from the 9 March 2009 stock market bottom, and while it has since retrenched, it is is still over 80% higher than where it was in Y 2007. It has outperformed stock markets over that frame and, now that a stock market correction is happening, investors who protect their assets by switching to Gold can help mitigate any further losses.

Too many participants failed to invest in Gold while stock markets were booming, thinking that the Bull Run would not end.

It is not too late to invest in Gold, and now might be the time to get serious about protecting a stock portfolio with a 10-15% position in Gold.

Symbol Last Trade Date Change Open High Low Volume
NYSEArca:GLD 124.98 8 February 2018 0.19 124.92 125.44 124.51 7,343,600
HeffX-LTN Analysis for GLD: Overall Short Intermediate Long
Bullish (0.25) Neutral (0.13) Neutral (0.08) Very Bullish (0.54)

Have a terrific weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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