The current financial world is looking more and more like the wildest rollercoaster ride out there.
While graphs show lines bouncing up and down as various factors impact everything from investments to companies to exchange rates, it is becoming more and more difficult to predict the future of finance.
Now the world’s most high-profile and outspoken investors, Bill Gross and Jeffrey Gundlach, have laid down some valuable advice for those in the game.
Writing his monthly investment-advice piece, a fund manager at Janus Capital once known as the “bond king” of Pimco, Gross kept mentioning gold – and here’s why:
In this high risk/low return world, the obvious answer is to reduce risk and accept lower than historical returns. But don’t you have to put your money somewhere? Yes, of course, except markets offer little in the way of double digit returns. Negative returns and principal losses in many asset categories are increasingly possible unless nominal growth rates reach acceptable levels.
I don’t like bonds; I don’t like most stocks; I don’t like private equity.
Real assets such as land, gold, and tangible plant and equipment at a discount are favored asset categories. But those are hard for an individual to buy because wealth has been “financialized”. How about Janus Global Unconstrained strategies? Much of my money is there.
In a much more direct approach Gundlach, who manages more than $100 billion in assets at DoubleLine Capital, spoke to Reuters, stating:
Sell everything.
Short and sweet.
He went on to suggest gold as the safest investment, acknowledging its history as a safe haven that investors turn to when anxiety levels rise. Even buying stocks of gold-mining companies is a great bet – and the price of gold is currently at its best level in two years:
Although that may be some great advice for investors in the States, does the same knowledge imply for the steadily growing economies here in South Africa? The only people who can answer that is Consequence, of course, who offer relevant and reliable financial advice for all your financial needs.
[source:quartz]
