“It’s a tale as old as time.”
I’m not referencing the live-action remake of Beauty and the Beast released this past week. I’m talking about gold — and the rich role it has in any savvy investor’s portfolio.
See, gold can be a fantastic hedge against inflation, geopolitical uncertainty, irresponsible banks, the Fed and even many black swan events. When investors lose confidence in the economy and markets — they rush to gold, which continues to be seen as more trustworthy than any government-issued currency.
After all, it’s held value for centuries, and it’s not disappearing anytime soon.
While gold has had its struggles these past few years — like in December of 2015, when gold hit a six-year low — nothing has changed about the very real fundamental reasons for adding this asset to your holdings. Which is why the metal has been in an overall rally since the U.S. abandoned the gold standard in 1971.
Savvy investors understand that value.
In fact, this past week, gold rallied to its highest finish in two weeks in the wake of Janet Yellen’s announcement. While the Fed raised rates by 25 basis points, as expected, it gave a much more cautious outlook than most analysts anticipated, keeping to its forecast of just two more hikes in 2017.
So precious metals bounced.
April gold futures climbed 2.2% to $1,227.10 an ounce — the largest one-day percentage climb since June 2016. Silver (gold’s sister metal) enjoyed a nice bounce as well. May silver futures jumped 2.4% to $17.33 an ounce — the highest daily percentage gain since January.
So to those who dismiss gold as an archaic “currency” out of place in a modern portfolio the way a tube television would be in a shiny-new smart home … I raise an eyebrow or two at their shortsightedness.
Those tuned into the long-standing benefits of gold will just go about quietly bolstering their holdings — comfortable in the knowledge that in the event of a sudden shock to the markets, they will have a shiny plating of precious-metal protection insulating their portfolio.
That’s why I urge you to add gold to your holdings if you haven’t already — and not just gold, but physical gold.
It’s your best option for “shock absorbing” your portfolio — and it’s more secure than owning it through an exchange-traded fund, which just exposes investors to more risks in the end.
One avenue to do this is through the EverBank non-FDIC insured Metals Select® Allocated Account. It allows you to purchase specific coins and bars, and it’s even IRA eligible (gold and silver American Eagle coins only). For the sake of full disclosure, we receive a marketing fee based on our relationship with EverBank. But, honestly, we’d work with them regardless.
Physical gold is your ultimate portfolio shock absorber. And that type of peace of mind is certainly precious these days.
Catch you next week.
Managing Editor, Banyan Hill Publishing