The price of gold is up a glittering 14 percent year-to-date, outpacing the S&P 500 by a full percentage point. Copper, however, tops the yellow metal’s performance, rising over 19 percent so far in 2024. And silver, hi-ho, takes the proverbial gold, rising more than 26 percent since the start of the year.
So for all the talk about the raging bull market in equities, it’s been the metals – precious and otherwise - that have really been shining.
Jim Caron, Portfolio Solutions Group CIO at Morgan Stanley Investment Management, for example, believes it’s a good idea for investors to broaden out and add metals to their portfolios if they haven’t already.
“I would favor copper more than those other metals only because it has a much broader implication to the global economy at this point,” said Caron. “And if you believe in the re-industrialization of the US and the electronification of the US, well, that electricity goes through copper wires so copper is going to be a big part of that.”
As for gold, Max Belmont, a portfolio manager at First Eagle Investments, says the yellow metal’s upward trajectory may not end anytime soon, even if the bull market in stocks peters out.
“Gold has served as a store of value over millennia and its unique risk return characteristics have enabled it to maintain its real purchasing power over time,” said Belmont. “So we see gold as a potential counterweight to equities.”
On the flip side, Gene Goldman, chief investment officer at Cetera, is “not a big fan” of gold despite its impressive run year-to-date.
“Let's say we do have a recession. And let's say we have an economic uncertainty. What happens? The dollar strengthens. Gold is priced in dollars. So we don't necessarily stick with gold,” said Goldman, adding that value investors can rest easy because they will generally gain some metals and materials exposure through industrial stocks.
Along similar lines, Daniel Lash, certified financial planner with VLP Financial Advisors, is avoiding a direct investment in silver despite its streak, saying he prefers not to be “overly concentrated” in a particular area of the commodities sector and as a rule does not market-time his investments.
“Silver peaked in 1979 at about $144 and consistently decreased to approximately $7.50 in 2001, from 2001 to 2011 the price increased to approximately $67,” said Lash. “Today silver is at approximately $30, so not the typical price appreciation we have seen in equities and with no dividends, which means timing of this investment is critical.”
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