Fund Manager Charlie Dreifus interviewed on Bloomberg shares his view of gold as an investment class. Charlie Dreifus was noted as the Fund Manager of the Year…so he’s no slouch. He discusses his “method” for picking good investments. Surprisingly, gold is missing.
He touches on NOT picking a mutual fund only by yield. He say chasing yield can end up putting you in some of the riskiest companies.
Charlie Dreifus No On Gold
The interviewer then ask if Mr. Driefus held any gold or cash…looking for position size estimates from Charlie.
Said he does not hold gold…but said by pure luck ended up late fall with about a 20% cash position.
Reasons Mutual Funds Pass On Gold
1. Gold unlike stocks and bonds pays no dividend or interest
2. Except for the recent few years, gold was either moving down or sideways
3. Gold stocks with exception of the past few years were horrible investments
4. One has to paint a “doom and gloom” economic picture to sell which impedes his ability to sell other investments…and remember mutual funds can only legally invest to the up side…no shorting.
So even though Charlie knows how to manage a successful mutual fund, he really can’t recommend or hold gold without jeopardizing the faith investor must put in the other companies in the fund.
I wonder if Charlie holds any gold bullion in his personal accounts?
Here’s the Bloomberg video…enjoy!
You guys don’t really care about a mutual fund manager…you make your own investment choices. I hope you seriously consider adding gold bullion to the mix. You’ll be glad you did.
Investing options are often so vast and confusing, one opts to make no decision over making the wrong decision. This is one of the many reasons I like and recommend owning precious metals as a necessary addition to everyone’s investment matrix. No one can argue the efficacy of that statement.
It’s unambigous…and truthful.
“Every investor should own precious metals”
A bold statement, no doubt…but one I’ll stand by.
The real question is not should physical precious metals be apart of a diversified investment portfolio, but when to go “heavy” on the metals, which metals, whether to use leverage, among others are the more pertinent questions….and where it gets a little confusing once again.
But the base line question…”Are physical precious metals a good investment for me?”…has been answered.
Why Are Precious Metals a Good Investment?
Over the coming weeks, I will write on all these topics and more but suffice it to say…
Physical Precious Metals are Good Investment because..
Can be a hedge against inflation
Can be a hedge against falling dollar
Can be a hedge against falling real estate values
Can never go to “zero” …has intrinsic value
Can be leveraged for greater rate of return
Can be traded long or short so money can be made regardless of market conditions
Can be a better option if stock, bond, real estate, and other markets are too risky
I could go on and on why owning physical gold (not gold futures or other derivatives…I’m talking about the actual gold bullion) or other precious metal is a fantastic option…especially now in our current global financial crisis.
