When Thinking About Asset Allocation Click here for a special Prudent Bear report, available FREE, only to Multexinvestor users. As the stock market continues its volatile ways, many investors are rethinking asset allocation. Typically, investors think stocks, bonds and short-term funds. We recommend expanding investment alternatives to include exposure to international bonds and gold stocks or bullion.
Gold is an example of how long it can take for an asset to recover from an investment mania.
We're just contrarian enough to think gold is due for an extended run. In addition to low investor expectations, gold has a number of things going for it. If the dollar weakens as we expect, gold could benefit as foreign investors increase exposure to a traditional safe haven. In addition, gold has typically served as a fine hedge against inflation, which, in our view is alive due to recent Fed easing. In terms of supply and demand, the outlook for gold looks downright bullish.