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What Billionaires Do to Protect Themselves During an Economic Crisis

Aug 20, 2017 | Peter Christensen |

What Billionaires Do to Protect Themselves During an Economic Crisis

Question: When it comes to getting advice about your finances, investments, and portfolio, who do you think is better—a small-time investor or some of the richest billionaires on the planet?

If you chose “richest billionaires on the planet” you’re on the right track because, let’s face it, nobody knows more about building and maintaining long-term wealth than a billionaire.

Now, truth be told, power players like these don’t usually make their plans known to the world. But, if you scan the financial news, elite investors drop plenty of hints like the ones below. In fact, several of the world’s top investors have recently signaled the need to diversify away from paper money and invest more heavily in gold.

Jacob Rothschild

The chairman of RIT Capital Partners in the UK, Rothschild disclosed recently that his company has not only reduced their US dollar investments by 50% but also increased their exposure to gold and silver to 8% of their total portfolio. His quote that “..central bankers are continuing the greatest experiment in monetary policy in the history of the world…We do not believe this is an appropriate time to add to risk” is very telling indeed.

David Einhorn

On a recent earnings call, Einhorn, the president of Greenlight Capital (a hedge fund based in New York), told the audience that Greenlight was keeping gold as their top position. A review of their documents also refers to their consistent interest in gold, and, in April of this year (2017), he said, “Gold remains a long-term position with a thesis that global fiscal and monetary policies remain very risky.”

Ray Dalio

The chairman and CIO of Bridgewater Associates has stated in the last few months that, for prudent investors, a well-diversified portfolio must contain from 5% to 10% in gold holdings.

The list of billionaire investors also includes Stanley Druckenmiller, Jim Rogers, John Paulsen, and others who are warning of an impending crash and, to protect themselves and their companies, are investing more heavily in gold.

Last but not least is Goldman Sachs, whose commodity team recently named three factors that should propel gold much higher and faster than usual.

1- Lower returns on the US stock market
2- Emerging markets with higher purchasing power
3- Peaking gold mine supplies in 2017

In short, to protect yourself like a billionaire in the coming weeks, months, and years, gold should definitely be part of your portfolio.