January 4, 2025
The 21st Century's Top Asset Should Boom More in 2025
Dear Subscriber,
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| By Jim Nelson |
Happy New Year!
It has now been a quarter-century since Y2K, if you can believe it.
While plenty has changed, there’s plenty that hasn’t. I’ll show you what I mean in a moment.
First, I invite you to guess what asset class handed investors the biggest gains since we changed our calendars over to 2000.
I’ll give you a hint. It’s just four letters long …
The S&P 500 notched a tidy 300% gain in the past 25 years.
But that’s nothing compared to the asset tracked by the purple line in the chart above.
That’s the price of gold, which returned 800% in that same time frame!
I’d ask you to also guess the main reason for gold’s outperformance. But I’m confident you already know it’s because the 21st century has been full of crises.
- The Dot-Com Bust struck immediately.
- Less than a decade later, we saw the Global Financial Crisis.
- Then, a dozen years after that, we had a pandemic that caused the world to shut down.
During each of these events, investors fled stocks — at least initially — toward safety. And as has been true for centuries, gold consistently served as a safe haven.
With so much going on in the world today, the need for added safety continues to grow.
But, as your experts pointed out this week, there are other reasons for gold’s recent surge to a 14-year high … and for a continuation of this rally.
Gavin Magor reminded you this week that gold provides another big benefit: portfolio diversity.
“That should be especially true in the new year, whose opportunities and challenges have yet to reveal themselves.
“Just like stocks and bonds, many variables impact gold’s performance.
- In 2024, buying by central banks and elevated retail interest, especially from China and India, drove up demand and, therefore, the price of gold. Asia consistently makes up more than 60% of gold’s annual demand.
- What’s not so great are the negative factors behind record-setting gold prices. Things like continued high inflation, the high cost of goods and services and currency depreciation.
“All those factors make gold, I believe, more valuable to you today as a hedge in your portfolio.”
Nilus Mattive — your chief safety guru — took it a step further and shared five golden rules for gold investing in 2025.
Of course, gold isn’t the only asset set to outperform in 2025. Sean Brodrick has a few bold predictions for this new year … and four ways to play them. You can read about those here and here.
Finally, even if you are still figuring out your investment strategy for 2025, Michael A. Robinson has you covered.
He shares his annual ritual to prosper in the new year. Check out his “Market-Crushing 2025 Action Plan” here.
That’s it for this week. As always …
Have a great weekend!
Jim Nelson
Managing Editor, Weiss Ratings Daily
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