Gold Is Doing a Rare Thing: 5 Things to Know Before You Buy
Arnold Van Den Berg was recently quoted in Barrons’s on the topic of gold. One section of the article highlighted the growing imbalance between government tax receipts and spending, which will likely force the government to "print money." This, in turn, would cause the U.S. dollar to lose value, especially compared to gold. With gold's relatively fixed supply, this scenario could act as a catalyst for increased demand as more people turn to gold as a stable store of value.
The article went on to say that some advisors believe that’s a good reason to buy. “It doesn’t matter who is running the government; they are both spending,” says Arnold Van Den Berg, founder of Austin, Texas–based registered investment advisor Century Management. The firm started adding gold to clients ‘portfolios two to three years ago and now has it at 6% to 7% of most accounts, says Van Den Berg, who worries about inflation eroding the purchasing power of dollars.
“We’re not gold bugs. I bought gold in the 1970s, but we didn’t own it again until a few years ago,” he says. “We can’t predict what inflation is going to be, but I have a pretty good sense history repeats itself.