The Role Of Gold Investing In A Stock Market Portfolio For 2024

In this video I talk about the role of gold investing in a stock market portfolio for 2024. Many people are bullish on gold and silver this year, as gold hit an all time high towards the end of last year, and is trading below it. However, in this video, I want to talk about some big picture reasons why I think it is wise to have a portion of one’s assets in precious metals.

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Who am I?

Michael Swanson is the founder and head editor of WallStreetWindow.com. He ran a hedge fund from 2003 to 2006 that generated a return of over 78% for its investors during that time frame and in one year was ranked in the top thirty-five hedge funds among several thousand tracked by hedgefund.net. He received a Masters Degree in history from the University of Virginia in 1998 and since retiring from the hedge fund world writes about global investment trends, the financial markets, and American history.

Hello this is Mike swatz of Wall Street window the odds are that you’re watching this video because you got an email from me telling you that’s up and it’s on YouTube now if you’re not on my free email list scroll into the description this video and you will see a link to

Get my free weekly uh newsletter completely free I was talk about gold today uh I have roughly 14% of my accounts invested in gold and silver ETFs these are metals ETFs they’re not mining stocks although I do own some mining stocks too but I see this as part

Of an overall investment strategy I’ve got regular stock market Investments too I’ve got Bond Investments too and bullish on gold many other people are bullish on gold and you can go and type in and watch endless videos I’m sure of um predictions for massive gains this year all over YouTube and articles on

The internet but there’s other reasons beyond that and why I’ve got 14% my money now in gold and that’s what I want to talk to you about today this year 2024 and the next couple years because I think gold investing is going to become a necessity here’s a of gold as we’re

Speaking today on on on the 10th it’s roughly trading around 2050 back in September it was below 1850 for a short amount of time but most of the last year was trading in a range between 1925 and ruy 2000 and we’re above that 2000 so that

That’s bullish you know itself if we go back from 1999 or or the some summer 2000 when the NASDAQ had a big Tech bubble top Internet stock Top Gold is outperformed the Dow since then and gold has been less volatile than the stock market uh too when the S&P 500 fell over

30% uh in 2020 in the spring gold fell roughly half that much and came back quicker than the S&P 500 so gold is actually less vol than the stock market and in times of turmoil acts as a a source of stability in a brokerage account that’s why I’ve got

14% of my uh Investments allocated currently to Metals um and if you look last year was a good year for the stock market as I’ve said in the last two videos I’m not bearish on the US Stock Market this year I think we can see a continue ation of of the cyclical bull

Market that I believe we’re in and that’s what I said at the beginning of last year we’re starting a cycal b Market when everyone else was so negative because of what happened in 2022 I shifted positive early last year and I remained that way if things

Develop and make me change my mind I will I I look at the charts and adjust my views based on them but what I want to point out to you is what happened in 22 uh bonds fell when the stock market fell too in fact the decline in bonds

Helped Drive stocks down because when bonds go up uh the yields that they have uh go down and when yields go up bonds go down so interest rates were going up in 2022 bond prices went down what you’re seeing is exchange traded fund TLT and TLT fell almost all bond funds fell

In 2022 those losses continued for bonds while the stock market was positive though in 2023 and we’ve seen a bottom in the bond market form in October I think it’s going to be a short-term bottom but it’s likely to last for all of this year which is good for Bond

Investors why does this has everything to do with gold though you see gold uh historically uh gold goes up and down uh most of it’s driven by changes in the value of the US dollar you see gold is a a hedge uh for when the go dollar Falls in

Value it gold goes up historically that’s what it’s done and I Dem going to demonstrate this to you with this indicator I just put on the bottom of this chart it’s a correlation indicator measuring the price relationship between gold and the US dollar Index USD on a 200 day moving average basis

Okay that s sound complicated it’s very simple when this indicator is at one Flatline it means the things are trading exactly lock stop and Barrel together when one goes up the other goes up when it’s negative they trade opposite to each other historically this indicator is is fairly negative close to

One uh trades below 75 um it’s it’s so so gold is a hedge for a day you know gold can go up and down a bullish on gold but gold also is a hedge against a declining US dollar and the US dollar Index um has had a rally last year and it’s

Been a decline since October a nation’s value of its currency is often linked to the debt situation that nation is in and interest rates in that country when debts low it’s it helps generate strong currency when rates go up and helps the currency too when the opposite two are

Happening that’s bearish and now we’re shifting into a situation where interest rate the ra the the last hiking cycle is basically over and debts in the United States are going to grow I’m going to show you that in a second so I you know that’s long-term bearish for the US

Dollar and that can hurt investors in the United States because that can generate inflation down the road I don’t think this going to be a problem this year but down the road it can become a problem can happen unexpectantly to people this will hurt the value of bonds

Um and in in in and be a I think a big potential problem so I own Bonds in my account I got some CDs in my account but there could be a day in which this becomes a big problem and gold will go up and help hedge those positions in

Fact I’ve mathematically calculations are I’ve looked into this and what happens in other countries if there is a currency crisis in a country the currency declines like about 30% typically gold will go up two to three times in value in that nation’s currency so you know that’s basically

What you need to do the Hedge um and that’s what I’m doing you know I’m I’m Bush I think I can buy this and make money I’ve done it before uh but I think it could be something that’s very important to own um and and and and and

Let me let’s get deeper into this topic here’s the national debt as I’ve been doing this video it’s it’s gone up uh probably several hundred million dollars that’s how quickly the debt is growing each taxpayer share that debt is now almost a million dollar okay you’ve heard about this over and over again

It’s been a fact of life but it’s it’s growing now into a crisis situation um it’s again I don’t think the crisis is coming next week or next month but I think it’s going to hit when there is another recession in the United States maybe that comes after the presidential

Cycle it looks like the Biden the FED are going to do what they can to keep the market up keep investors happy and excited um in in the economy doing okay but there will be another recession one day and when it happens we could have a

Big problem the last time it happened um what you’re looking at is a chart of the the in the United States this is Federal Reserve information uh Fred is a the St Louis Federal Reserve economics website economic data for the public this is not this is this is the Federal Reserve data

And what you’re seeing is the percentage of that total debt to G GDP and it’s now over 100% it’s at 120% in fact so that’s an elevated level it’s the highest level since World War II it actually surpasses the World War II level and history shows that economic crisis occur in a country

When this gets up above 120% it can get close to 200% that’s the situation in Japan right now uh but doesn’t mean it comes that it’s an indicator doesn’t tell you um oh it’s going to happen as soon as you get above the level but it

Says this is danger danger danger and um you’re walking a at night uh with the lights off and you don’t know when you’re going to hit the wall uh but it’s going to happen and and the situation is getting so big now that the interest on the debt in

Itself has now surpassed uh the amount of money spent on many uh Government Federal programs passing the amount of money spent on Medicare in 2023 passing veteran spending passing snap passing spending spent on children you know it’s and it’s good it’s it’s it’s poised to pass this year the defense budget and

And then eventually within three years uh to pass the amount of money being spent on Medicare to become the biggest uh component of the federal budget simple interest on the debt and um now it’s difficult to predict the exact year the exact month that’s going to happen because the uh amount of money

That the federal government takes in um can go up and down depending on how much they get from tax revenues so when a recession hits tax revenues Decline and uh if there’s no cut in spending Boom the budget busts even more that’s essentially what happened in

2020 and why the next recession when it does come can put uh the US government the federal government in a big uh crunch when it comes to its budget deficit when it comes to this component of the budget the net interest payments and it can just balloon and blow up up

And if that occurs expect the US dollar Index to decline uh I think it can go down this year very slowly not really be a visible problem to the public and create a you know help push up the price of gold help push up the price of silver

In like a stealth rally that the masses ignore but the people inside gold and silver benefit from but a day can come when the next recession hits and and say it’s in 2025 or 2026 or 2027 in which it becomes a problem that impacts the bond market then makes bonds

Go down in value like they did in 2022 and causes a lot of problems and that’s why I have dedicated in my account of roughly 14% for Metals ETFs not simply because I think it can go up but they can go up but because they act as a

Hedge for uh traditional Investments I got in in the stock market and in bonds I own bonds I own CDs too in fact I think now is the time to buy bonds and cities to lock in the current rate of the yields before the Federal Reserve

Does lower rates this year so I’m a macro investor I invest in multiple markets and think of each market as a separate component I’m in gold and silver because I’m bullish but as I said I see them as a necessary NE necessary to have them because I got Bond

Investments too and look I could be wrong and thinking this won’t be a problem for a couple years and it’s a sudden blowup this happened to people in England uh two years ago there was a sudden decline in their currency which was quite shocking and it happened when

A new prime minister came in and said look I’m going to stimulate the economy by cutting taxes increasing spending and boom they had abandon that program but there is turmoil there turmoil is something that we have seen in the past couple years last year we saw some dips

In the market but not nothing that was too alarming I think this year we may see things you know continue to be quiet I know we saw a dip in in the beginning of this year some stocks are off their highs uh but uh look at how much we went

Up in December got extremely overbought so it’s natural for a dip or consolidation to play out in the stock market that seems to be what is going on with me or or to me with the markets but gold silver 2024 I think is good for both but I think they a necessity to

Have you know well balanced uh portfolio so if you want more from me uh click the Subscribe button click like and then YouTube will send you a alert all the next time I have a video up and hit the like button put your comments in the

Section below so we can see what you think about the markets this year year as we started out are you bullish on gold and silver if not why if there’s something more bullish you are on tell us we want to know what is going on uh and and what other opportunities I’ve

Talked about other opportunities too to start out this year talked about REITs talked about utility stocks and and I’m looking at other stuff too um so be talking uh with you later