When dealing with Wall Street investors you often have to understand that what they push their clients into investing isn’t always what they themselves would recommend. Due to the commission structure that accompanies stock and bond sales, many financial firms push their salesmen to recommend stocks and bonds to clients in order to capitalize on sale and redemption fees. The idea of investing in gold, which investors hold onto for the long haul, therefore never even pops up on many investment advisers’ radar screens. But every now and then a veteran investor comes out and starts speaking the truth about gold.
One such veteran investor who has done that recently is legendary former Franklin Templeton fund manager Mark Mobius. Mobius, who has started his own asset management firm, has become super bullish on gold. According to him, “As these interest rates come down, where do you go?” In a low interest rate environment with stock markets set to crash and cash constantly losing value to inflation, that makes perfect sense.
Mobius recommends that investors keep AT LEAST 10% of their portfolio in gold. While that’s a conservative allocation for serious gold investors, that’s still way more than even many gold-friendly investment advisers would recommend. But that’s really the bare minimum to protect your portfolio.
Those investors who invested 30% of their portfolios in gold before the financial crisis would have seen their portfolios protected during the crisis, suffering far smaller losses. They then would have seen their portfolios making massive gains following the crisis. And today those investors would have a portfolio that’s almost identical in value to an all-stock portfolio and poised to outstrip those who remain in stocks.
With stock markets retreating from all-time highs and gold climbing, investors with gold in their portfolios are well positioned to benefit financially in the near future no matter how bad the economy gets. Are you poised to take advantage of gold’s imminent rise?