Top Value-Fund Manager
Posted By | May 24, 2016
I read in Barron’s this week about Charles de Vaulx, the hot-shot Chief Investment Officer at International Value Investors, a well-regarded fund that usually concentrates on value stocks. But Charles is singing a different tune nowadays, and has increased his holdings in gold and cash while cutting stock investments. I think you’ll find his reasoning interesting.
Charles began stockpiling gold about a year ago when he realized the European Central Bank (ECB) would continue its disastrous market-meddling – ultra-low or negative interest rates coupled with quantitative easing (money printing). He also felt that the U.S. Federal Reserve would raise rates only sparingly. He was right on both counts, with the Fed lifting rates minimally, only once, in December 2015. Few observers expect another hike anytime soon.
Now, the head of the ECB, Mario Draghi
Recently made an interesting comment. He said if his current strategy doesn’t do enough to stimulate the economy, his next step will be to have “helicopters drop money” for consumers to spend. That’s a metaphor for unleashing the printing presses and flooding the economy with more paper currency.
One of the reasons I advocate investing in physical gold is that politicians and economists sometimes do really strange things, and I think it’s pretty strange to make currency worthless and ignite inflation. Yet that is precisely what Mario means to do. The Fed chairperson, Janet Yellen, is not much better. The last time she spoke on TV, gold spiked $30/ounce higher.
Charles notes that gold has appreciated against virtually all currencies this year. To hedge against a further erosion of paper-based assets, Charles and his fund are raising their commitment to gold to between 6 and 7 percent. And he’s talking about owning physical gold bullion. Charles is staying away from alternative gold investments, such as mining stocks. He knows that weak balance sheets and weaker currencies make gold mining companies “less desirable to own than the gold bullion itself.”
Charles de Vaulx is no fool. He’s been around a long time and knows what’s going on. His growing commitment to gold speaks volumes on where prices for the precious metal are heading. As you know, I see $1,300 an ounce as the next objective, and after that, I believe the sky’s the limit. With those prices in mind, it’s far from too late to open an Augusta Precious Metals Gold IRA. Contact us today!
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