Gold = Fire Insurance for a Financial Portfolio

[Justin Bilyj]

I really liked the advice of Jim Rickards with regards to gold and its relation to a financial portfolio likened as [fire] insurance. The guy is a talking head in the financial media.

Rickards points out that as gold is insurance you should not worry about its price as much as you would other assets. When you buy insurance you are not concerned when the price of the insurance falls. What is important is that you own it as it will protect from worst case financial and monetary scenarios.

Anyone here are fan of this shiny barbaric metal?

 

[pcbinsurance]

I'm a fan and think 5-10% of your portfolio should be there.

 

[thomasm]

I'm a fan and think 5-10% of your portfolio should be there.

Only if you had the good sense to buy during the years 2002-2009. Glancing at the 30 year charts, it looks like gold peaked around 2010-2011.

http://goldprice.org/spot-gold.html

 

[pcbinsurance]

Gold has retraced nicely since then. I've been a believer since the late 90s.

I personally believe gold will double from where it is now, in the next 3-5 years.

 

[Tahoe Ray]

I'm not smart enough to predict this stuff but lately gold and inversion strategies have become pretty popular in my FIA market.

 

[Cash]

I see gold as a store of value. I guess that could also be insurance.

I do not believe that gold is a "safe haven." Gold goes up and down all the time and the market for gold is kind of screwy. I cringe a little bit when I hear the pundits call it a safe haven.

 

[Justin Bilyj]

Its indeed a safe haven...from a currency devaluation.

 

[MW Agent]

History shows gold is not a great inflation hedge.