Hold 20% in gold as global economy is an accident waiting to happen - Frank Giustra
Editor's Note: 2020 is expected to be another year of significant uncertainty and turmoil. But the question is what assets will emerge the victor when the dust settles from the global trade war, Brexit, recession threats, negative bond yields. It's a showdown of global proportions, so don't miss all our exclusive coverage on how these factors could impact your 2020 investment decisions.
(Kitco News) - The U.S. will soon be closing the book on a momentous decade as the S&P sees its longest bull run in history; it has rallying consistently for the last 10 years. The Index is up 184% since 2010.
The gold market is also attracting new attention on the cusp of the new epoch. Although prices are still down from its record highs hit eight years ago, the precious metal is ending the decade with a gain of 34%.
The questions investors are now asking is: what is in store for markets as the world embarks on a new decade. What are the risks and opportunities to watch for in the next 10 years?
For Kitco News’ Showdown 2020 outlook, we are have asked a panel of experts their thoughts on the next decade and how they would invest $100,000 for the next decade.
Expert: Frank Giustra
Claim to Fame: chairman of Leagold, co-founder of The Clinton Giustra Enterprise Partnership
How would you invest $100,000 in the next decade?
If someone has a maximum of $100,000 to invest, my suggestion would be to own at least 20% gold and stay liquid. Most investments (stocks and bonds) are overvalued. I am mostly keeping my eye on global trends in both central bank monetary policy and debt levels.
Our future will be largely based on those two things. Neither, are looking too rosy.
What are the biggest trends you are watching heading into the new decade?
I fear one of the biggest threats is a potential implosion of the corporate bond market. Too much of that massive debt is a hare's breath away from junk status.
What are the biggest threats you see in the next 10 years?
It’s impossible to look out 10 years. There is way too much almost unprecedented uncertainty in both geopolitics and trade. I subscribe to Ray Dalio’s “paradigm shift” theory.
How long do you think the bull run in equities will last?
The current equity bull market is already the longest in history. Furthermore, it's been fuelled by artificially low interest rates. We are beyond bubble territory...watch out.
Any final comments about what the next decade holds for investors?
I believe we are overdue for some kind of accident in the financial markets. Some, yet unknown catalyst will set off a chain of events that will destroy a lot of wealth. Be ready, because at some point, there will be tremendous opportunities to invest in. In the meantime, stay liquid and make sure you own a lot of gold.