As geopolitical tensions mount and economic uncertainty looms, investors are looking to safe haven precious metals like gold to fortify their portfolios and ward off personal economic crises.
Offering advice to new investors, Adrian Day of Adrian Day Asset Management shared three tips on the sidelines of the 45th annual New Orleans Investment Conference earlier this month.
“One is understand what you’re looking for from gold,” he explained. “Are you looking purely for insurance on the currency collapsing and the world going to hell in a handbasket? If so, you buy bullion and that’s it, and you keep it at 10 percent.”
Those looking to diversify their portfolios with the yellow metal should consider a few things first. “Are you looking to hedge on the rest of your portfolio? Maybe you buy some of the mining stocks, senior mining stocks,” Day said.
Most important is for investors to have a plan and end goal, and to avoid overextending themselves.
“I have no problem with people putting 30, 40, 50, 60, 70 percent of their assets into gold if they want to, but don’t put more than you’re comfortable with — that’s critical — and don’t invest more than you can afford,” said Day.
“Always have a cushion, because inevitably you will need to take money out of your account at the worst possible moment. It never, never happens that you have a catastrophe and need money urgently and everything you own is up — it doesn’t happen. So always have a cushion.”
Using information available via websites, reports and news coverage can help investors determine which company is right for them, especially when dealing with smaller, lesser-known companies.
That said, Day warned investors that if they are not going to commit to spending an hour after dinner each day researching companies, then they should not invest like they are taking that approach.
“Maybe for most people who want to get involved in gold, maybe they go buy gold bullion and maybe they buy Franco-Nevada (TSX:FNV), which is a great company — very well diversified, great balance sheet. It’s got revenue from 39 different mines, so you’re getting good diversification and you leave it at that.”
He added, “(But) if you’re going to buy AJAX Exploration then you had better of done your homework on AJAX and follow it.”
Listen to the interview above for more from King on the decline of the dollar and how to brace for economic uncertainty. You can also click here for our full New Orleans Investment Conference playlist on YouTube, and here for Day’s thoughts on central banks and interest rates.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
