Three reasons to avoid gold

It’s often just a flash in the pan

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Gold is frequently touted as a must-have investment for the most intense of risk-mitigation situations, a “when all else fails” hedging instrument. Indeed, pick an ailment: Inflation? Economic and political crises? The decoupling of the United States and China? Pandemic-fueled collapse of modern society? “Hedge with gold.”

With unprecedented amounts of monetary stimulus being unleashed and the global economy still buckling, multiple countries still engaged in armed conflict or otherwise in crisis, and plenty of shared uncertainty over the future, gold continues to make the rounds as must-have asset. This, despite the reality that it doesn’t consistently hold its value well over time.

Now, in the midst of another meteoric rise in value ($2k+/oz on August 6, 2020), massive central bank accommodations, and COVID-19, here are 3 reasons to actually avoid gold, both as a physical or paper holding, apart from a very small percentage of a well-balanced and diversified portfolio:

  • It’s a highly psycho-emotional asset.

[Continue reading]

The full story has been updated as of September 24, 2020, and moved to Intersectionist by Philip Valenta, MSF, on Substack.

HedgeHound

Hedge…everything.

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