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The Best of What They Said and I Read Week Ending 9/23/18

"The Best of What They Said and I Read” week ending 9/22/1018

Short excerpts from articles I found interesting

I may not agree with the author and the following material is not intended as investment advice

Barron’s – September 21, 2018 – Gold Is Cheap.  Inflation Is Coming.  You Do the Math. – by Andrew Bary

“Gold has gotten a bad rap.  Long seen as the investment choice of the cranky and the fearful, the metal yields nothing; as Warren Buffett has said, it just “looks at you.”  This year has been especially lackluster for gold. Its price has slumped 8%, to about $1,200 an ounce, and is off more than 35% from its high of $1,900 in 2011.

“…But this out-of-favor asset class now deserves a place in investment portfolios.  Compared with stocks and other financial assets, gold looks inexpensive. More important, inflation is starting to pick up in the U.S. and in much of the world as central banks shrink their enormous balance sheets. And gold has represented a good defense against inflation eroding the value of a stock or bond portfolio. Over time, it has held its value against the dollar. Gold was $20.67 an ounce 100 years ago and that bought a good men’s suit. At $1,200 an ounce, the same is true today.”

“…The knocks against gold are many. It’s a static asset that yields nothing, and physical gold costs money to store. Berkshire Hathaway CEO Buffett says he would rather own productive assets like businesses, farms, or stocks. “Gold gets dug out of the ground in Africa or someplace,” he noted 20 years ago. “Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

“…U.S. stocks are at record levels exactly at a time when global stress—trade tensions, populist nationalism, and the like—appears to be growing. This may be an opportune moment for investors to shift at least a portion of their portfolios to gold: both the metal and depressed mining shares.  To flip Buffett’s phrase, gold may do more than just look back at you in the coming years.”

U.S. Global Investors – September 21, 2018 – Investor Alert - by Frank Holmes

“…Historically, volatility has increased and markets have dipped leading up to midterms on uncertainty, but afterward they’ve outperformed.  Of especially good news is that we’re entering the three most bullish quarters in the four-year presidential cycle, according to LPL Financial Research. The fourth quarter of the president’s second year in office, which begins next month, and the first and second quarters of the third year have collectively been the best nine months for returns, based on 120 years of data.

“…The major market indices finished mixed this week. The Dow Jones Industrial Average gained 2.25 percent. The S&P 500 Stock Index rose 0.85 percent, while the Nasdaq Composite fell 0.29 percent. The Russell 2000 small capitalization index lost 0.55 percent this week.  The 10-year Treasury bond yield rose 6 basis points to 3.06 percent.”

The Rotarian – 2018 – Travel as a Force for Peace - by Rick Steves

“…It was 1969, I was 14 years old, and one night my dad came home and said, “Son, we’re going to Norway to see the relatives.”  I thought, “Stupid idea.”

"A few days after arriving, IO was sitting on the carpet with my cousins in Bergen watching Neil Armstrong on TV as he took “et lite skritt for et menneske…one giant leap for mankind.”  It occurred to me that was more than an American celebration.  It was a human one.    Without realizing it, travel was broadening my perspective.  While reinforcing how thankful I was to be an American, it was also making me a better citizen of the planet.  It was shaping the 14-year-old me to be a force for peace and an advocate for the importance of travel.”

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