As theoretically expected, the Gold price has been going up recently. That proves that buying stocks and gold at the same time is still a good idea, although it is believed that Warren Buffett’s investment theory which is like buying as much as you can if you find a good investment target is seemingly the best plan because he has been making the best result in the entire universe in terms of investment. Every investment approach, however, might work differently for every person. Well, theoretically speaking again, what is the good of investing in both gold and the stock market in this economic situation is that you can expect a high profit when the economy is acceptable, and if it goes down, the slightly gold price will mitigate the loss.
Inflation is incoming because central banks in developed countries, in general, are planning to execute another monetary easing. That means there would be a positive effect on gold price because it is susceptible to inflation in general. However, one thing you should be careful about is that when the economy crashes, the gold price also goes down severely. Historically speaking, however, eventually, the gold price went up after the great depression in 2008.
It is also generally said that you should add a government bond to your portfolio to reduce the risk of buying stocks. But I doubt the effectiveness of buying bonds, especially the Japanese government. First of all, the government bond market in Japan is in a bubble because the central bank is publicly purchasing a lot of them. Second of all, inflation has adverse effects on the price of bonds. But still, it is probably not a bad option to add US Treasury to your portfolio.
In conclusion, buying Nissan stock (TYO: 7201) is the best option :D, because Nissan GTR is cool.
No comments:
Post a Comment