The New York Times dedicated a chunk of last Sunday’s paper to gold as a mainstream investment. In other words, gold is now legit -- no longer can it be dismissed as the asset of choice for fringe types with a cellar full of canned goods and a stash of bullion buried in the backyard.
He's not so sure that's the case now though--at least not yet.
From a recent research note by UBS: “The sense that some investors only trust a gold holding if they can see it and touch it is a clear indication that some investors are buying gold as a hedge against a full-scale financial crisis and currency debasement.”
In a sense, it's the same argument I hear from my brother. Real estate is "real," but who knows what stocks (or bonds, dollars, etc.) are really worth.
All in all, I agree with much of what he has to say, but perhaps not with the following:
Some extreme gold bulls are urging investors to move half or even more of their portfolio into gold – we are not in that camp. We consistently suggest that investors consider a maximum 10 percent allocation to gold-related assets – half in bullion or bullion ETFs and the other half in gold stocks or a good gold fund – and that they rebalance each year to capture the swings.
Personally, I am weighted closer to 50% in gold, silver, and related equities. On the other hand, my income is 100% in dollars, and that is what I'm trying to hedge against.
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