This year Gold is up 25%. Silver has gained 35%. The NASDAQ up 29%. The Dow Jones Industrials down 1.3%. Looks like 2020 will be a year to remember for High Tech Stocks and Precious Metals… or a year where you’ve been left out.
Unfortunately, I’ll bet 95% of our reader’s Stock Brokers have never mentioned the profit potential of Gold and Silver. For decades, financial advisors were called “Stock Brokers.” Almost to a person, they are trained to think in Stocks, recommend Stocks, and talk down other investments.
Financial Advisors Sell Stocks
Stock “sales” men or Stock “sales” women should be the more correct way to think of the role of too many financial advisors. Gold, Silver, Commodities and Real Estate are venues foreign to their thinking, beyond their training.
The fact that you are on this website shows that you are “thinking outside the box.” To truly diversify your portfolio, keep researching Gold and Silver because the old ways of investing have changed radically.
60/40 Investing is Dead
That was the headline that caught my attention recently in Barrons magazine— 60/40 Investing is D ead. As long as I can remember, financial advisors recommended 60% in Stocks and 40% in Bonds. As you get older, you flip the percentages.
In the Barrons article, Carl Meyer, chief investment officer of Silver Rock Financial explained—
“60/40 was supposed to be a hedge when the economy turns sour, rates would go lower and you would do well in fixed income while equity portfolio got hurt. Now, they are trading in unison.”
If both Stocks and Bonds are risky— and fall at the same time, we need a new diversification plan, immediately. The last time I personally owned Bonds they were Austin School Bonds paying 6.5% tax free. The benefits were obvious.
6.5% tax free, no risk, out of mind for ten years… perfect. No mas!
Today, Bonds may pay enough to beat inflation— maybe. The near-zero-interest world of fixed income leaves you with 40% of your portfolio that needs a home beyond Bonds.
Guess what? This is a universal problem for portfolio managers. Solution? Find an alternative investment that will grow your portfolio and provide safety from COVID 19, a political crisis, lousy interest rates, a falling Dollar, or another Stock Market crash.
Answer: Gold! Not 40% of your portfolio, but maybe 5% like some analysts are coming around to recommending. Maybe another 5% in Silver while it’s still below $30 an ounce.
Money managers who have taken this approach in 2020 have been handsomely rewarded. Consider carefully whether you should add previous metals to your savings plans. Past performance is no guarantee of future value for Stocks, Bonds, Gold or Silver.
Most people who buy Gold and Silver will wisely buy physical Gold Coins and Silver Dollars outside of their brokerage accounts. This gives you privacy from the prying eyes of government and keeps a portion of your savings private— even from your broker.
Life is all about balancing risks and rewards. Invest carefully.