Egyptian Billionaire Sawiris Invests Heavily in Gold

A recent Bloomberg article reports that Egyptian billionaire Naguib Sawiris has channeled half of his $5.7 billion net worth into gold and has said he believes the precious metal will rally further, “reaching $1,800 per ounce from just above $1,300 now, while ‘overvalued’ stock markets crash.” In an interview with Bloomberg, Sawiris said, “In the end you have China and they will not stop consuming. And people also tend to go to gold during crises… Read More

Gold Outperforming Since Fed Rate Hikes

Since the Fed raised rates last month, gold has outperformed most major asset classes, according to a recent Bloomberg article. Though counterintuitive, the article says, gold’s strong performance has become the norm since the global financial crisis. “Unless greenback weakness reverses,” says Bloomberg intelligence analyst Mike McGlone, “gold should shine.”

Insights on Owning Gold

In a recently published article in Advisor Perspectives, Robert Heubscher interviews First Eagle Investment’s Thomas Kertsos to gather the research analyst’s insights around owning the precious metal. Here are some highlights: Current trends in the gold market: “We see that the Fed communications about rate hikes and election outcomes continue to be significant drivers of the gold price in 2017, exactly as they were in 2016.” Why hasn’t the price of gold increased more since… Read More

Copper Better Hedge than Gold

While gold has been the popular inflation hedge over the past ten years, copper was a better bet according to a recent Bloomberg article. “While data show that broad community indexes provided the best bang for the buck during periods of rising costs in the U.S., the red metal stands out. According to the article, for every 1% annual increase in the consumer price index since 1992, copper rose by nearly 18% compared to 5.2%… Read More

Gold and Stocks on Different Paths

The inverse relationship between gold and stocks has never been this pronounced, according to an article in this week’s MarketWatch. However, it also references analysts’ opinions that the two may soon “be poised to rise together as both can benefit from low yields.” Motley Fool’s Sean Williams recently wrote that according to FactSet data, the negative correlation between gold futures and the stock market recently hit minus 0.63 (a factor of minus 1.0 would indicate… Read More

Is the Gold Hedge Really Just All Hype?

These days, gold looks particularly shiny to investors who are trying to mitigate risk in an uncertain global economy (so far this year, gold is up 29%). But an article in last week’s Wall Street Journal reports findings of two Harvard researchers who say the precious metal doesn’t deserve the hype. Professor Robert Barro and PhD student Sanjay Misra present new data showing that gold “moves independently from whatever the economy is doing.” The researchers… Read More

Zweig: Gold Is Not All That Glitters

In the summer of 2015, Jason Zweig wrote an article for The Wall Street Journal in which he claims that investing in gold (which was trading at around $1,130 an ounce) was a “leap in the dark.” In a WSJ blog earlier this month, he writes “Gold is up 20% since I ridiculed it; the U.S. stock market, measured by the S&P 500 with dividends reinvested, is up less than 1%.” But that’s not the… Read More

George Soros is Feeding the Bear

In recent years, 85-year-old billionaire George Soros hasn’t done much investing of his own. He has instead focused on public philanthropy and public policy (and is a large contributor to the super PAC backing Hillary Clinton). That changed earlier this year when he began spending more time directing trades at his firm Soros Fund Management LLC, which manages $30 billion for Mr. Soros and his family. Some close to him say that his resurfacing has… Read More

Soros Beefs Up Hedge against the S&P 500

Soros Fund Management has doubled its put option (the right to sell shares at a specified price) on the SPDR S&P 500 exchange-traded fun (which tracks the benchmark U.S. index), according to an article this week on CNBC. The asset management company founded by billionaire George Soros said it owned an option to sell 2.1 million of the index shares in the first quarter of 2016 (up from an option for 1 million shares held… Read More

4 Options to Beat Inflation in the Future

A recent piece in Forbes offers 4 suggestions for beating inflation. After noting that “the present 0% rate [of inflation] blends an upward march of 2% in the cost of services with a collapse in the price of oil,” the article observes that “if commodities rebound over several years, 4% inflation could surface.” To protect against this risk, the article explores 4 options: Treasury Inflation-Protected Securities (TIPS): These offer real protection for the principal invested,… Read More