Soros and Paulson Are in Gold—You Should Be too!


"[Gold will] protect you from losing all in another economic mega-collapse."

Everyday some analyst or other telling us that just about every other metal out there has been outperforming gold, with the implication that gold investment is ineffective as a wealth generator. However as the recent strength in the gold price has shown, there are plenty out there—among whom should be numbered mega-investors George Soros and John Paulson—who don't think that way. Or at least they see gold as the best way of protecting what they have.

Track back a couple of years to early 2008. Most metals were riding high and analysts were telling you much the same story as now. Other metals would perform better than gold. Take your money out of gold and invest in platinum, copper silver, etc. And by October that year, that particular house of cards came crashing down along with the general stock markets. Fortunes were lost, banks and hedge funds collapsed and so steep was the fall, reminiscent of the Wall Street Crash of 1929.

True there may still be legs in the current recovery, and copper, platinum and palladium may keep on making good returns for investors in them. There may not be a second dip in the recession. Massive state defaults may be avoided, but can you afford to take this risk? Gold offers a home for a decent part of one's portfolio. It may not make you a fortune, but it should continue to protect you from losing all in another economic mega-collapse.

Many will also tell you that junior gold stocks are the answer in making money in the sector, but gold juniors collapsed along with the base metals stocks back in 2008, although like their base metals counterparts have made great gains since. Thus any gold stock portfolio should hold a good proportion of majors, which are far less vulnerable, along with perhaps some carefully selected juniors/explorers to give you a lift while markets remain strong, alongside some physical gold and /or gold ETFs as well.

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