Investors are being urged to reduce risk in their portfolios now by buying gold. Chief gold strategist George Milling Stanley says that investors should focus on the addition of gold due to its proven ability to provide investment returns and its role in risk reduction for those exposed to risk via other assets – something which is especially pertinent right now.
Milling Stanley said, “I’m encouraged by the price action because maybe the markets are getting more comfortable with the Federal Reserve’s monetary policy. The gold market is more than just where interest rates are going,” he said.
“Historically, the two promises gold makes in a portfolio is to improve your returns and reduce your risks. Right now, investors should focus on gold’s ability to reduce risk in your portfolio.”
This advice comes as worrying signs emerge in the USA, with Treasury Secretary Janet Yellen warning that the government could soon run out of cash unless the debt ceiling is further lifted. Writing in the Wall Street Journal, the Treasury Secretary said that the government could find itself without necessary funds as soon as next month unless congress acts now.
For investors, this presents plenty of risk says Milling Stanley. He explains, “There is still plenty of uncertainty out there to be worried about. Equities are a risk asset. There’s no question about that. And I think it would be a good idea for investors to recognize that. People piling into risk-on assets like equities at the current pace is a disturbing phenomenon. You need to protect yourself when you are vulnerable and right now equities are vulnerable. If you look back at past financial crises, one of the primary causes in some cases, has been the underestimation of risk.”
Of course, gold is well established as a risk diversifier and safe store of wealth. The precious metal has also been reemphasising its strength and solidity in recent weeks, making now the perfect time to buy.