By Atlas Capital
A lot has been said and written about the recent fall in gold's price.
Gold is an interesting asset.
· It pays a negative return (you need to pay someone to secure it).
· It's not used widely for industrial purposes.
Warren Buffett observes: “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
Gold can only be rationalized as a store of value, an alternative to fiat money that we have all grown so accustomed to. And it tends to perform well during environments of market distress.
As an ‘insurance’ policy during these times of distress, we feel gold has an appropriate place in an investor's portfolio (less than 3% of total assets). As with any well diversified portfolio, it's important not to ‘compartmentalize’ any individual holding; focus on how the overall portfolio is performing.
Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures. For information about Covestor and its services, go to http://covestor.com or contact Covestor Client Services at (866) 825-3005, x703.