Gold. A shiny metal that has captivated people for centuries. While it has lots of uses, one of the most important for investors is as a "fear gauge."
In the construction of my MarketFlex investment portfolios, I use gold indirectly. It's part of the risk management of a portfolio adding diversification. But with pressures from Fed rate cuts, uncertainty regarding the Middle East and upcoming US presidential elections, and a slow down in China, should more gold be added to your portfolio?
Recently, I was asked these questions as part of an article that appeared in Investment News magazine. As I noted there, “As for gold, I hold it indirectly in client portfolios through a diversified commodities ETF. I think that gold is a good barometer of fear. In this case, there’s continued fear about international strife and uncertainty about the outcome of the US presidential election. There’s also wariness from investors seeing stock prices continue to rise or worries about Fed policy. Although I believe the Fed cut rates not because of weakness in the economy, many investors may not be looking behind the action. There’s also an element of greed at play. As gold prices have climbed with central banks and Chinese investors gobbling up supply, you have a bandwagon effect from those worried about missing out on the latest, glittering trend."
To read more about this topic and see insights from other industry peers, check out the article here: Will Gold Continue to Shine Through Year End?
