The country’s securities regulators have issued rules that discourage investors from putting money in mutual funds holding gold. Here’s how…
12:30p ET Thursday, February 28, 2019
Dear Friend of GATA and Gold:
Nick Barisheff of bullion dealer and metals fund manager BMG Group in Canada writes that the country’s securities regulators have issued rules —
— that discourage investors from putting money in mutual funds holding gold. The rules, Barisheff writes, assign the monetary metal a risk rating of medium to high, even though the Bank for International Settlements now classifies gold as a risk-free asset like U.S. dollars and U.S. Treasuries.
Barisheff’s commentary is headlined “Devastating Losses Are Coming” and it’s posted at the BMG Group internet site here (selected excerpt below):
I hold financial professionals who recommend monetary gold to their clients in the highest esteem. It is their sage advice that will protect investors from the unprecedented dangers they face today in the markets. However, many advisors are no longer permitted to recommend physical gold or precious metals in client portfolios as a result of the new rules defining risk in mutual funds. Many clients who had been holding gold for years were forced to reduce their positions last year by their investment advisor’s dealer. The timing for this couldn’t have been worse, as the resulting rise in their gold holdings would have reduced the losses in their portfolios from the market carnage we have witnessed since late September.
The equity selloff that began in October is intensifying and threatens advisors, MFDA dealers and investors with a high probability of a 50-70% loss of capital and a corresponding loss of income in 2019. A decline of this magnitude will have devastating effects on retirement portfolios. Many investors will not recover in their lifetimes. This could snowball into advisors and investment dealers no longer being viable. The Everything Bubble appears to be bursting and, as history has shown, investors’ fears can easily grow into a panic.
The final quarter in 2018 is a textbook display of why investors must own gold. There is no liquid asset more negatively correlated to the financial markets. Investors who do not own monetary gold may find themselves dangerously exposed to market volatility without the much-needed diversification/portfolio insurance that gold offers. If the current downturn in the market continues, as the world’s leading financial experts predict this asset may be the only form of wealth preservation that works
Experienced financial professionals understand that gold bullion is an alternative to cash. Ray Dalio, chairman of the largest hedge fund in the world (Bridgewater & Associates), once stated that, “If you don’t own gold…there is no sensible reason other than you don’t know history or you don’t know the economics of it.”
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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