I recently read a Barron’s article about Gen Z’s newfound interest in gold. The gist of it? A lot of younger investors have been seeing gold jump in price. They want in. But financial advisers and other supposedly-seasoned market pundits are telling them to stick with stocks and bonds, advises Nilus Mattive, editor of Safe Money Report.
In some cases, they admit that a small allocation to precious metals has some benefit. However, they’re telling clients to avoid chasing performance or succumbing to FOMO (fear of missing out).
The irony, of course, is that they do not seem to think large allocations to stocks are just as dangerous right now. Or that they’re also being driven by massive FOMO. Or that we really could be on the cusp of a major re-ordering of the global monetary system and the dollar’s role (or should I say, DIMINISHING role) in that future system.
SPDR Gold Shares (GLD)
From my vantage point, any financial adviser should be telling their clients — including their younger ones — that a core allocation to precious metals is critical. It doesn’t have to be 20%. But I reckon the vast majority of professionally managed individual investment accounts still have zero allocation to precious metals other than token exposure through mining companies in major market indexes.
It’s the same with crypto, of course. These alternate forms of money never seem to resonate with mainstream Wall Street people — whether you’re talking about the typical financial adviser or Warren Buffett.
But as I explained to you back in December: “Since the US dollar went off the gold standard completely in 1971, the yellow metal has risen from a fixed price of $35 an ounce to a recent level around $4,300. That amounts to a 9.1% average annual return...not all that far behind the broad stock market’s average annual total return of roughly 11% over the same period.”
And since then, gold has gone on to a recent all-time high of $5,589. More importantly, if the yellow metal happens to go to $10,000 an ounce from here — as many of us believe possible — then it would quickly jump to a performance level on par with that of the US stock market!
So, yes, you can have your stocks and bonds. But you can have your precious metals and crypto, too. Indeed, you SHOULD HAVE all these things - whether you’re 20 and starting your investing journey or 75 and comfortably retired.
