In the ideal investment portfolio part of your asset allocation model should include gold because we know two things will affect risk – growth and inflation; what we do not know is growth going to be higher or lower and is inflation going to be higher or lower. Gold for a long time has been the all weather risk protection and if you consider Syria where internal strife has been going on for years, what is there banking system like? what if you had Syrian Pound and had to flee the country? if you had gold, then it could be exchanged for higher currencies in whatever country you end up in. Hopefully we will have fewer Syrian examples. In terms of gold, because the world did not know what would happen to a Donald Trump Presidency, it was thought when he won gold would go up in price. It may still because of inflation – if President elect Trump cuts taxes and spends money on infrastructure, unless he achieves much higher growth there will be a shortfall in the government’s bank account leading to a need to raise funds. Maybe growth comes at a higher rate, maybe consumers rush to spend their money, maybe or what is your macro outlook. Ian McGugan asked since gold prices fell, is it a buying opportunity? The answer is it depends on your outlook for America under President elect Trump.

Gold tends to move in the opposite direction of the American dollar because the metal is denominated in US dollars which means a stronger dollar and anyone outside of America is more expensive. When the dollar strengthens, the price of gold falls.

Moody Investors Services believes gold will trade around $1,250 but can easily fluctuate between the range of $1,100 and $1,300. At the time this article was written gold was trading at $1,181.

Another fund manager Charlie Morris at Newscape Capital in London believes gold is trading for the first time since the credit crisis at fair value. He believes unless the stock market goes down, stocks are a better alternative to owning gold. However, you can look at some of the better gold stocks.

Linking to dividend paying stocks, the world is connected which means economies at connected. Years ago, politicians could react in a manner which best suits their internal borders but now the world reacts. Look for cause and effect and be prepared, sometimes you can wait it out if you have picked the best companies preferably paying a dividend. We do not know until the event has happened but we can make educated guesses.

There are more questions than answers, till the next time – to raising questions.