by Michael Tarsala
Gold prices reached a four-month high late this week as market participants speculate as to whether the metal could move even higher if more economic stimulus is announced.
That might happen as early as September. There were three key sentences in this week's FOMC statement appear to indicate that the majority of voting members are now ready to enact more stimulus sooner versus later.
Past rounds of Fed asset purchases were seen as inflationary. As a result, risky asset classes including gold, oil, as well as stocks rallied during QE1 and QE2.
Investment manager Matthew Pierce of Island Light Capital, who runs the Income Portfolio and two other investment models at Covetor. He says he remains cautiously optimistic about the stock market, and is keeping a large gold exposure, which he considers a diversifying asset. The SPDR Gold Shares ETF (GLD) remains a top five holding for the Income Portfolio.
One other manager that runs a non-commodity strategy, yet has a large gold exposure is Ben Wong. The GLD accounts for 25% of the assets in his Tactical and Opportunistic investment model.
If you would like to talk about how the possibility of QE3, upcoming policy changes, or the presidential election might affect your investments, talk to us at Covestor. You can call us Monday through Friday in our New York office at 866-825-3005 X 703.
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