Jaime Carrasco's Top Picks: January 19, 2022
BNN Bloomberg
Top picks from Jaime Carrasco, portfolio manager, Canaccord Genuity
MARKET OUTLOOK: The patience trade
Jesse Livermore, one of the best traders of all times, commented that “patience is the key to success” in the investment field, his advice to deal with it - “buy right and sit tight”.
In preparation for rising inflation resulting from central bank policy, I continue to advise that clients hold some asset allocation in precious metals. Throughout 2021, this strategy required patience as the paper price of gold did not rise in tandem with all other commodities, due to the belief that this time inflation will be transitory.
However, it appears that this might not be the case and that it’s not different this time. My main concern for investors is that the 7 per cent is being calculated using modern math and not the same math as in the 1980s, which would calculate a much higher number.
Might explain why global central banks and Asian investors continue to increasingly take more physical out of the market as if inflation was a true concern, even though Western investors stay away from this asset class because the paper price has been declining throughout 2021 with until now complete disregard for inflation.
Within the allocation in the portfolios, physical gold is considered a cash equivalent, the investment is the producers and royalty companies, the growth is the developers, and the speculation is the explorers.
