The Economic Times
English EditionEnglish Editionहिन्दी
| E-Paper
Search
+

    Go for gold! Chris Wood’s asset allocation for uncertain times

    Synopsis

    Amid a gloomy global economic outlook and continued uncertainty, if there is one asset class that looks to flourish, it is gold. The asset class is up more than a quarter so far this year in international markets.

    “China is really the key story, and they have managed the pandemic very well. The Chinese economy is back to normal faster than any other major economy, and the Chinese stock market remains a bull market,” Chris Wood said.

    Commodity Summary

    MCX
    Mumbai: Even as uncertainty rules markets, Chris Wood is most optimistic on the prospects of gold from a 10-year kind of perspective. He also finds Indian and Chinese equities very attracted. And the market expert says he would definitely have cryptocurrencies in any portfolio allocation.

    In an interview from Athens, Greece, Wood, the global head of equity strategy at Jefferies, said if he had to allocate $1,000 currently with a 10-year investment horizon, $300 will go into the yellow metal, another $200 to stocks of gold miners and $50 to silver.

    Love for all that glitters!
    “I like gold and it has done very well this year, despite the collapse in demand for gold in India,” Wood told ETMarkets.com

    “The reason is the very aggressive extremely stimulating monetary and fiscal policies announced by the US Fed and the ECB (European Central Bank) in response to this pandemic,” he said.

    Amid a gloomy global economic outlook and continued uncertainty, if there is one asset class that looks to flourish, it is gold. The asset class is up more than a quarter so far this year in international markets.

    The safe-haven bet has been drawing a lot of investor attention in recent times, after central banks globally unleashed ample liquidity to ensure stability in financial markets amid testing times for economies from New York to Tokyo.

    Wood is not the only one who dotes over gold mining stocks.

    Warren Buffett, known for his aversion towards gold as an investment option, surprised investors when he bought a stake in Toronto-based Barrick Gold Corp, one of the world’s largest mining companies, earlier this year.

    In a regulatory filing detailing its US-listed investments as of June 30, Berkshire disclosed a new 20.9 million share investment worth $563.6 million in Barrick Gold Corp, even as it cut stakes in some of the largest US banks.

    $200 each in Indian, Chinese equities
    Chinese equities are among the top bets for Wood in the emerging markets space as the world’s second-largest economy returned to normal sooner than others. “China is really the key story, and they have managed the pandemic very well. The Chinese economy is back to normal faster than any other major economy, and the Chinese stock market remains a bull market,” Wood said.

    He also finds India interesting at this point of time. “The (Indian) economy is nearly back to normal based on the measures I look at. It looks like the virus has peaked,” he said,

    Biting into Bitcoins
    Cryptocurrencies also figured on Wood’s list of preferences as he said he would allocate $50 to Bitcoins.

    Bitcoins have risen more than 64 per cent for the year to date, making them one of the best performing asset classes so far in 2020, as it also beat gold by a strong margin.

    “I think it is worth having an allocation to Bitcoins. Frankly, I should have started in Bitcoin many years ago. I would have made a lot of money. But I did not know how to,” Wood said, adding that he was concerned about being hacked as he was not a tech expert

    “What has changed now is that you can hold Bitcoin in an institution or custodian form. So it has become safer. The supply of Bitcoin is contracting, and the supply of dollars is expanding,” he added.
    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Also Read

    The Economic Times