Jim Cramer Suggests Investors Could Put Their Money in Gold if They Find The Stock Market Risky
Jim Cramer, former hedge fund manager and host of CNBC’s Mad Money, recently said that investors who are worried about the US – China trade dispute and the Federal Reserve’s interest rate policy, should take a stake in gold.
He went on to say that investors who are looking for an insurance policy against economic uncertainty and volatility should consider investing in gold. Though Cramer has been proven to be wrong so many times in the past, certainly when it comes to politics, he may be onto something here.
While it’s true that precious metal prices may be going higher, Cramer says that buying actual gold coins or bars isn’t the best approach.
He suggests that unless you can afford to buy gold bars and store them in a depository bank, owning gold is a bad idea.
He added that most gold coins are sold at a substantial markup by the coin dealers, and they are not liquid either. He may have a point since it’s not easy to sell gold coins through a brokerage account.
Cramer recommends that you should get direct exposure through his favorite gold-based exchange-traded fund (ETF) – the SPDR Gold Shares Fund, a gold-mining ETF, or the stock of a top-quality gold producer like Barrick Gold Mining Company.
The Mad Money host says that the gold-mining ETFs and SPDR Gold Shares Fund can be advantageous because they take out much of the risk and inconvenience.
For example, gold-mining ETFs cluster risky mining stocks together to hedge against single-stock/single-mine risk, while the SPDR Gold Shares Fund owns the physical gold saving you storage costs while providing liquidity.
Cramer says Barrick Gold is “worth keeping an eye on”
The former hedge fund manager says investors should look out for Barrick Gold, which recently acquired Randgold Resources.
He thinks the combination of two mining giants could prove highly beneficial as the company has the lowest total cash costs in the sector and it also has a great diversified portfolio of assets around the globe. Remember, Cramer is speaking about investing in gold here and not politics so he may be offering some savvy advice.
He concluded that even though this may not be the best time to invest in gold, investors will certainly benefit from owning at least a little as insurance against the turbulent market and uncertain times even though the market is always turbulent and uncertain. When is it not?
It was certainly turbulent in 2008 and 2009 during the Barney Frank and Alan Greenspan real estate and financial crisis, respectively.
Apparently, Cramer agrees with experts’ opinions that gold is always a winner in the time of chaos and the market is always chaotic. At least now America is growing at 3% and not in the recession that lasted until 2016.
If you are even a little bit concerned about your portfolio, you should consider buying the new Barrick Gold, the GLD, or even one of the gold-mining ETFs.
For the extra cautious investors, Cramer suggests waiting until Barrick Gold reports its first quarter as a combined business.
This article contains the author's opinions. These are not investment-related recommendations. Do not consider the article as any type of commercial solicitation or an investment product offer.
About the Company
Ely Gold Royalties Inc. is a Vancouver-based emerging royalty company with development assets focused in Nevada and the Western US. Its current portfolio includes 33 Deeded Royalties and 20 Optioned Properties, and the portfolio is currently generating significant revenue.
Ely Gold’s royalty portfolio includes producing royalties as well as royalties on fully permitted mines, mines under construction, and development projects that are being permitted for mine construction.