30 years ago US endowment funds had all of their assets in stocks and bonds...the great age of bipolar asset allocation.
Today the same funds can have up to 30% of their holdings in commodities.
Retail investors as so often is the way followed on later... commodity backed ETFs have gone ape shit this last few years, with grain and soy-bean ETFs now easily accessible to retail investors.
The alternative, niche, and hard asset classes have truly emerged, although ETFs are not always the best way to play them.
David Einhorn (aka a previous big shorter of Lehman's stock mentioned in Ross Sorkin's superb 'Too big to fail') last summer moved all of his funds gold position out of the SPDR ETF (world's largest), into physical bullion last year. And why? COST! He wrote in his next quarterly letter to investors in his fund, that at a bare minimum this would reduce cost.
As hard assets continue their rise, with great websites like hardassetsinvestor.com appearing to cater for an educational demand, I ask the question: where will it go next?
I like earth metals, wine, lithium, and lanthanum.... but then I completely missed garlic last year... where was a garlic investment product when we needed one.
David Einhorn.....legend!
ReplyDeleteYeh man, Einhorn's a real winner...in the fund manager dream team for sure...with Buffett at the back, and Paulso up front.
ReplyDeleteI think Earth metals are going to be huge! HUGE! I'm onto 'em, and Lithium. Not many products I really like for them, as I want real metal... I prefer it that way. No 'promises' from an ETF provider please.
In the mean time I'm gonna keep sitting on a whole pile of bullion. The real stuff, not an ETC, much cheaper to store and in my name.
Peace
Ross,
ReplyDeleteWhere'd you buy your physical from?
I have used GoldMony for last 5 years odd, but my friend tells me they are too expensive for what they do. Apparently the transaction fee is larger than others. I like James Turk but will save money where ever I can given that I buy a bit of gold every month.
I have heard of GoldMoney, but previously used Billion Vault as lowest costs. Now use mycommodity.com as even lower costs and prefer it.
ReplyDeleteAll similar businesses I think, I'd have a look at them all and decide what works best for you.