With continued uncertainty in global markets, today one firm’s chief investment strategist says it’s time to own gold, silver and “stuff stocks.”
A Return To “Real Assets”
December 23 (King World News) – Here is a portion of Raymond James Chief Investment Strategist Jeff Saut’s year-end letter to investors: “Another theme we think is surfacing is inflation driven by Trump’s potential fiscal stimulus program. Hence, a return to “real assets,” or stuff stocks, should have an increased weighting in portfolios. Verily, the price of real assets, relative to financial assets, is at historic lows…
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Consequently, investors’ mindsets should be focused towards higher inflation, higher interest rates, and reduced disinflation. As an example, China’s PPI hooked up in September for the first time since 2012. We believe the same thing is happening here in the U.S.
Time To Own Gold, Silver And Other Hard Assets
Accordingly, REITs, timber, agriculture, collectibles (wine, art, diamonds, precious metal coins, farmland, etc.), and MLPs should have an increased weighting in portfolios, in our view. To this MLP point, we recently met with one of the savviest MLP-centric portfolio managers on Wall Street, who believes the midstream and downstream MLPs are ripe for a number of good years going forward. He suggests the bad news is in the rearview mirror: the capital markets are wide open for the MLPs; we are consuming an extra 1 million barrels of crude oil per day, and the MLPs traded at around a 30% discount relative to par.
Speaking to valuation, of the major asset classes, emerging markets remain the cheapest and we recommend tilting portfolios accordingly. And we favor active management over passive management at this stage of the market cycle. Manifestly, when stocks are undervalued, and the indexes are rallying, you want to own cheap beta. But, when stocks are neutrally valued, you want to be an active manager who can say, “I don’t want to play the FANG stocks and low volatility names.”
***To listen to the extraordinary KWN audio interview with whistleblower Andrew Maguire, where he discusses the gold and silver smash, what is really happening with gold demand in India and China, government plans for capital controls and much more, CLICK HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: Look At What Is Happening Around The World Right Now CLICK HERE.
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