Ask Terry Questions ETF – GEUR and GYEN to buy Gold

ETF – GEUR and GYEN to buy Gold

By Terry Savage on February 19, 2016 | Investments

What is an appropriate percentage of total portfolio to invest in both GEUR and GYEN ETF’s? I already own ISHARES GOLD ETF which accounts for 5.5% of after tax portfolio and no current holdings for Gold in SEP IRA.

Terry Says:  In general, the idea of owning gold is a “bet against the currency.”  And with all the “money printing” that has gone on in recent years, you would think currencies would have less value.  And they do. But the trouble is, with every central bank trying hard to devalue its currency —  to make its exports appear cheaper to others — ALL currencies are falling in value against each other.  And the dollar has been relatively strong against every other currency.  So gold hasn’t made much headway when priced in dollars.  But it has had a nice run when priced in yen or Euros.  These two ETFS, and I have written about them before, allow you to buy gold in terms of these currencies.  They are traded on the NYSE, just like GLD, which is a way of buying gold vs. the dollar.

Now, how much?  I’ve always been at a minimum of 15 percent, and frankly usually a higher percentage of my portfolio.  That hasn’t made me very happy — until recently!  Instead of having global inflation (too much currency printing) we have been having global DEflation — a slowdown because the money being printed is just sitting on the sidelines and not being invested in economic growth.  All it takes is one spark to set this fuel afire — but it hasn’t happened, yet.  I consider it a sort of insurance policy against all these efforts to create inflation by printing money.  So far it hasn’t worked too well this cycle.  But I started a long, long time ago at much lower costs!  I’ll let you decide the appropriate percentage for your own portfolio.




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