Some of our most iconic and enduring images throughout history and popular culture have a gilded tint to them. When I think of the precious metal, I’m reminded of King Midas, the treasure troves of ancient Egypt, the California gold rush and the 007 villain Goldfinger, just to name a few.
However, while we love gold in our movies and mythology, gold as an investment has been frowned upon in many mainstream circles, dating back to the jettisoning of the gold standard in the 70s. I learned from my parents and grandparents to buy your blue chip stocks and hang onto them.
I still remember my grandmother handing me an IBM stock certificate in 1979 and thinking how cool it was to hold that asset in my hands. Although, I didn’t tell her, it would have been even cooler to hold a gold coin, the preferred asset of pirates and kings.
But gold bugs are popping up all over. They’re no longer on the fringes or hiding in plain sight. If you’re not a “goldmember” yourself, you probably know one. I sure do. I married into a family of them. And my in-laws are hardly the exception.
A recent Bloomberg Businessweek article states that “billionaire John Paulson raised his stake in an exchange-traded fund tracking the price of gold while selling other stocks during the second quarter, leaving his $21 billion hedge fund with more than 44 percent of its U.S. traded equities tied to bullion.”
The article goes on to say that “Paulson & Co. purchased an additional 4.53 million shares of the SPDR Gold Trust, the firm's largest position, and bought more shares of NovaGold Resources Inc.”
And, in a recent correspondence, Jeffrey Nichols, Senior Economic Advisor to Rosland Capital tells me he’s over the moon in his love for gold as an investment. “I’ve been unwaveringly bullish on gold for nearly a decade . . . and suspect I’ll remain bullish for at least a few more years. Indeed, I strongly believe that the price of gold will more than double — and possibly triple — before the end of this decade.”
But Nichols is clear in his defense of the asset. “Please don’t label me a gold bug. I see nothing magical about the yellow metal . . . and those who attribute to it miraculous powers or foresee it resuming its sometimes historical role as the central anchor of the world monetary system are sure to be disappointed.
“I consider myself a dispassionate economist, analyst, and observer of the U.S. and global economic, political, societal, and demographic trends — and what I see ahead is a super-bullish long-term future for the yellow metal,” Nichols says.
Whether gold is right for you as a personal investment or to advise for your clients, there’s no denying that the yellow metal that entranced everyone from ancient sailors to the miners of the Great American West is making its way back as a treasured asset.
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