Investing in gold is the best ‘speculative’ bet there is today…(OMG…MarketWatch!)
Gold is risky, but it could pay off big over the next few months
Jeff Reeves
MarketWatch.com
Sept 26, 2016
I am a big believer in the barbell approach to investing. That is, I have a big portion of my money in sleepy index funds, and buy-and-hold dividend payers and value plays, and a smaller portion in rip-roaring trades that I hope work out in short order.
And one admittedly risky trade that could pay off big-time in the coming months is to go heavily into gold.
Now, first, a disclaimer: I have written regularly about the pros and cons of buying gold at certain moments in time, and always try to stress that I am agnostic about the precious metal. I think it’s preposterous to presume that gold is a “safe haven” given its incredibly volatile price history; gold is down roughly 30% from its peak about five years ago even as the S&P 500 SPX, -0.78% has surged about 85%. But at the same time, I think it’s ludicrous to write off gold as some tinfoil-hat investment or an all-out gamble akin to investing in microcap stocks.
Gold, simply put, is an investment. And I try to view it as such, based on the current macro and market conditions.
It’s moderately risky as far as investments go, sure. But anyone who tries to paint the precious metal as a bulwark against disaster or a pitfall to be perpetually avoided is missing a key piece of the market puzzle.
Because through the end of 2016 and into the start of 2017, gold could be poised for a big leg up even as stocks risk running out of gas.
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