Gold bullion is without question the hard asset of choice.
Gold bullion – standing strong.
December 02, 2010 – The gold bullion market paid little heed to the striking rally on Wall Street yesterday, and for good reason. We all know that winning investment strategy hinges on diversification, the optimal mix of optimal hard and soft assets. Today there are few viable options in soft assets while gold bullion is without question the hard asset of choice.
Among traditional investments stocks are taking the lead only by default. Admittedly there is some encouragement in global economic growth, which, although still below forecasts, is in aggregate above the 30 year average. Even the Euro zone is shored up by Germany. More important, however, equity yields are beating those of bonds by a considerable margin and looming global inflation further favors stocks.
That stocks come out the winner among soft assets does not assure their safety, however. To the contrary, with a price to earnings ratio over 12 equity investments carry significant risk. To offset that risk investors are taking stronger positions in gold bullion and are likely to continue doing so as long as the market remains promising.
None of the social and economic conditions that have driven the bull market in gold bullion have improved to any measurable extent. Gold remains the safe haven investment preferred by the vast majority of investors and that, by many accounts, has moved the market into the super bull stage. The market’s appeal will undoubtedly boost hedge investments, making it even stronger.
At the very least gold bullion has another three years to run in the super bull phase. While the future is highly questionable for traditional investments it is comforting to know that gold bullion can be counted on to stand strong.
