Many Unscary Reasons to Add Gold
By: Adrian Ash
Jul 12, 2012
Never mind inflation or credit default. There are plenty of less scary reasons to consider gold investing too…
GOLD IS OF COURSE for kooks and weirdos only – those doom-mongers who, bothering to read history, think printing money risks massive inflation, and who also fear banking and even government default today. Can you imagine!
Still, as we’ve learnt since gold’s record peaks of summer 2011, it does much more than go up in a straight line. And that’s why gold investing might also for other people too – better-paid, less wild-eyed people in sharper suits. Or at least it would be. If only professional money managers studied the data, like the doom-mongers read history.
“Asset allocators at major retail [investment] firms have their equity weighting the lowest in over 15 years,” reckons David Lutz at Stifel Nicolaus, which itself runs some $126 billion in assets – “well below 2009 levels.” It’s the same story in Europe, and in the City of London it’s samer still. “UK pension funds have less invested in equities than at any time since the 1974 stock market crash,” reports the Financial Times, citing Swiss bank UBS’s Pension Fund Indicators 2012 report and pointing to the average fund’s 43% investment in listed shares, down fully 7 percentage points last year from 2010.