Diversifying with commodites? Watch how they roll.

Bloomberg/John Authers/5-26-2022

cartoon image of a complacent reader contentedly smoking his pipe reading the newspaper

“Times like these call for commodities. That’s what common sense dictates, and it’s one of those rare occasions when experience and theory agree; in times of inflation, commodities are a better bet than either stocks or bonds. The latter stand to be damaged by inflation, while the former actively contribute to it. And indeed, commodities have had a great time of it since the inflation scare began to take hold early last year.”

USAGOLD note: We see gold as a members of the commodities complex, but having a wider profile. Inflation is not the only apocalyptic horseman it challenges. It also has a history of protecting against stagflation, deflation, and hyperinflation. So, though Authers is correct that commodities require more attention than stocks or bonds, we still see gold’s primary role as a longer-term armchair investment – portfolio insurance rather than a speculation. If, however, one chooses to treat it as speculative, Authers advice, as delivered at the link, applies.

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