Note: Paul and I recorded this on Wednesday and finished just minutes before Trump’s tariff announcements tore the markets apart. So our analysis of that will come soon. However, a good risk-managed strategy such as the one Paul’s firm runs can really blunt the volatility and help preserve capital. To schedule a call with Kiker Weatlh Management, please go to PeakFinancialInvesting.com and fill out the simple form to begin the process.
Executive Summary
In this episode, I dove into the fascinating world of gold and commodities with Paul Kiker from Kiker Wealth Management. We explored the surprising performance of gold over the years, discussed the dynamics of the gold market, and considered the implications of recent large-scale gold purchases. TLDR: It’s Big Money!
I also shared my thoughts on the potential for a great reset and the ever-looming possibility of the Great Taking getting triggered.
The Value of Gold
I’ve long been a gold bug, and my first major purchase of gold was back in 2001. Despite the ups and downs, my compounded annual return on that investment has been 10.25%, which has outperformed the S&P 500, including dividend reinvestment. This return might actually reflect the true rate of inflation over that period. Wall Street and Central Banks have long dismissed gold as a barbarous relic, yet they wrap around gold’s movements in a shroud of secrecy, which gives away their true feelings on the matter. They love gold, they just don’t want you to love gold.
Big Money Moves in Gold
Recently, there was a massive purchase of gold contracts, amounting to over $11 billion in one day. This was a big-money move. Such a large purchase could indicate a lack of trust in the current financial system or preparation for a potential credit crisis. The movement of gold into the U.S. and the demand for physical possession suggests that something significant is happening beneath the surface. It’s a signal that big money is seeking safety in gold, possibly anticipating a financial reset.
Commodities vs. Stock Market
The relationship between commodities and the stock market is at an interesting juncture. The Goldman Sachs Commodity Index, compared to the S&P 500, is at generatinally low levels, suggesting that commodities are powerfully undervalued relative to stocks. This could be a massive opportunity for patient investors. As we see shifts in energy production and demand, particularly with oil and natural gas, the potential for rising commodity prices is significant. This shift could lead to a rebalancing of portfolios towards commodities, which might outperform stocks in the coming years.
Conclusion
As we navigate these uncertain times, it’s crucial to pay attention to the signals the market is sending. Gold and commodities are telling us something important, and it might be time to consider rebalancing portfolios to include more of these assets. The potential for a great reset or a shift in the financial landscape is real, and being prepared is key. Whether it’s through owning physical gold or investing in commodities, understanding the dynamics at play will help us make informed decisions for the future.
by barbarad