Hold gold: insuring your portfolio could prove lucrative
“Put 10% of your portfolio in gold and hope it doesn’t go up,” says a Wall Street adage. Never has the advice seemed more apt than during the past 12 months. Stocks have been almost unstoppable. America’s benchmark S&P 500 index is about 40% higher than it was a year ago. The UK mid-cap FTSE 250 has done almost as well. Even the FTSE 100 blue-chip index has jumped – and by nearly 1,000 points.
And yet gold, at around $1,790 an ounce, is down by 15%, and silver by more. A year ago, gold was north of $2,000/oz. Silver was testing $30/oz. Today gold is at $1,790/oz; silver, $23/oz. Find me another asset that has fallen in price with all the quantitative easing, or money printing, that is going on – there aren’t many.
They say a rising tide lifts all boats, but gold and silver have both been bypassed in the broad commodities rally. The brutal truth is this:
