Financial Advisors Say They Can't Stem The Flood Of Clients Who Are Insisting On More Gold

Golden Spike

Photo: Wikimedia commons

This should be totally obvious and predictable, but this is amusing nonetheless…Financial advisors say their clients are demanding more and more gold, says, WSJ, and the same financial advisors who are trained to think that their clients are probably idiots when it comes to investing decisions, think this means gold is in a bubble that should be avoided.

The FAs acquiesce, and of course they buy their clients gold (though no more than 5% of client portfolios!).

What’s interesting, though, is that in keeping with traditional ideas about portfolio allocation, a lot of have been selling into the rise:

As the price of gold has climbed steadily, investors have remained interested, if not always for the same reasons. While many of his clients own iShares Gold Trust, he has been selling small lots to keep the metal from becoming too big a part of their portfolios.

Clients “check to make sure they own it; then they ask should I buy more?” Mr. Middleton said. “The answer is usually ‘No.’ “

Financial adviser Bob Kargenian, in Orange, Calif., has gone a step further and begun to sell. For instance, for his moderately aggressive clients, he has cut exposure to Van Eck International Investors Gold Fund, a mutual fund that focuses on gold miners, to about 1.8% of investment portfolios from about 3.5% at the end of September.

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