Gold Allocation Discussion

In the following video, David Morgan (of The Morgan Report) discusses sensible gold bullion investment allocations as we hear from financial experts like David Harquail, Jeffrey Christian, and Nick Barisheff.

We also explicitly cover Jeffrey Christian's recent 25% Gold Bullion allocation study here which backtests bullion investment allocation performances spanning from 1968 to the year 2016 vs. US equities and US bonds, respectively.

The results would surprise most often ignorant mainstream financial media talking points about gold bullion allocations.



Why an Allocation to Gold Bullion Currently Makes Sense?

S&P 500 price to earnings valuations is currently much higher than they were before the 1987 Black Monday crash and even at current values above the 1929 Black Tuesday crash level.

Perhaps now is the time to take some profits from stock markets and roll them over into precious historically undervalued commodities (see below).

The following chart, provided by Incrementum's In Gold We Trust 2018 report, illustrates that the relative valuation of commodities in comparison with equities currently seems low by historical standards.

S&P 500 vs Commodities Stocks vs Commodities Equities vs Commodities SD Bullion SDBullion.com Gold Allocation

Chart Source

Compared to the S&P 500, the GSCI Commodity Index is now trading at its lowest level in 50 years (full fiat currency era post-1971) and significantly below its long-term median of 4.16 (see the chart above).

Remember too, physical commodities cannot go worthless, whereas financial stocks and bonds historically all have and do.

If we postulate the general tendency of cyclical financial reversions to the mean or median, we anticipate attractive commodity investment opportunities currently and better performance for bullion investment allocations to come. Some historically accurate precious metal analysts we noted earlier are already calling for new record gold prices by the first half of the coming decade.

The final chart below echoes the reason why dynastic families always seemingly have a large portion of their wealth allocated to gold bullion (land and high-end art as well).

Commodities vs US dollars long term real things vs fiat currency SD Bullion SDbullion.com

Chart Source


While fiat currencies (e.g., fiat US dollars post-1971) by their very design, lose their value over the long term to real assets.

Conversely physical bullion has historically proven to preserve its wealth over not merely cyclical bull markets, but for millennia and throughout history.

These charts and the facts specifically show that precious commodities like goldplatinumpalladium, and silver bullion remain historically undervalued vs. other asset classes. We believe now is an excellent opportunity for value investors to sell things that are overvalued and buy precious metals historically undervalued currently.

We leave you with the following gold investing fundamentals video, for a better understanding of gold's ongoing role in the global financial system.



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James Anderson
James Anderson
Content Director

A bullion buyer years before the 2008 Global Financial Crisis, James Anderson is a grounded precious metals researcher, content creator, and physical investment grade bullion professional. He has authored several Gold