Precious Metals Portfolio

I have been catching up on financial markets since I have returned from my travels and have been amazed to see the markets at new highs given the amount of news and uncertainty we have been seeing this year. I have stayed away from the markets since last year as I think it is only a trader’s market right now as I feel the institutions are unloading their assets on retail investors trying to chase returns of strong assets. The market feels somewhat inflated and manipulated as the actions taken by governments and agencies continue to support the printing of money through issuing debt.

I feel that the trend is unsustainable and there is potential for at least a slowdown in the short term with a collapse also possible. I believe this because the traditional tools of monetary and fiscal policy makers are limited going forward as interest rates remain relatively low and taxes have also come down. In the meantime, the economic growth has been moderate at best and global growth has not been consistent despite the factors and policies supporting it. Therefore, I think that an inflationary environment can be predicted in the future. A traditional way of hedging this risk is to own precious metals and other hard assets.

Before starting to invest in cryptocurrencies, I had starting to accumulate some precious metals to hold for a hedge and storing values. I had targeted to get towards 5% of invested assets which is where I am finally at. These include only investable assets as some jewelry I have is not included as most has more sentimental value than their value in the metals they contain. However, as I have continued to read and create my own views of the future, I believe that some more allocation in the short term is warranted. Since I have gotten out of stocks and bonds in general, I still have some capital to allocate in the coming months which could land in precious metals. It seems as I have not been alone as of late when looking at prices.

Source

Gold’s lowest price of the year has been around $1,230 which is where it started the year and has not turned back. This could be signaling a reversal of a very soft market for a number of years despite inflation continuing to remain tamed as per government metrics. However, we have seen a number of catalysts which seem to be supporting the price as demand as improved. It is said that a number of Central Banks are even buying some for their reserves in hopes of backing currencies and values. There continues to also be geopolitical tension in various parts of the world which could have gold become more in demand if conflicts arise. Lastly, the reversal of monetary policy calling for interest rate increases has been another fundamental aspect to consider. Gold leads most but the others have followed in tandem.

I decided to breakdown my portfolio by type of metal to see how well diversified it was. To my surprise, it was more spread than I have thought. These allocations are based on cost not value as I do not consistently value the assets with the fluctuations in the market as they are more stores of value and hedges for the long term. However, I clearly see that a good opportunity will be to add some more Silver into the portfolio considering its relative value and availability to buy right now. I will be looking to get some more over the coming weeks so will be watching some of the communities around Steem to see what they are buying these days!

It is a fun investment/hobby as my daughter has enjoyed seeing them as I always tell her that they will all be hers some day! I do not expect to post frequent updates on the portfolio but like the thought of providing more of my allocations in general to monitor them and compare with others as I get feedback. Right now Crypto and this make up 25% of my invested assets which I would not have imagined five years ago! It demonstrates how we must all evolve and adapt as opportunities arise!