What should you keep in your portfolio to protect it from inflation?
Eclectica Macro founder Hugh Hendry recently told Kitco News that under the current conditions of macro uncertainty, investors should focus on real physical assets – especially gold.
Hendry suggests allocating 5% of one’s portfolio to gold. That’s because in the past 12 years it has touched the $2,000 mark numerous times: it seems like there is a price barrier, and while many people wish to hold gold, there isn’t enough economic incentive for the price to remain high.
Hugh Hendry believes that in the coming months or years the price will finally break through the $2,000 resistance – in which case he will increase his portfolio allocation. He stressed that after going above $2,000, the price will fall again, but eventually it will reach $2,100, $2,200, or even $2,300. The expert says he will keep buying gold if it happens.
In spite of Hendry’s bullish gold outlook, he is even more excited about Bitcoin – and has allocated 20% of his portfolio to it. He stressed that he invests in BTC specifically and not in crypto in general – and that this approach has proved effective.
Hugh Hendry believes that the price of BTC could triple, while this is unlikely for gold. Indeed, if the price of gold were to go up to $6,000, its market cap would range from 30 to 50 trillion dollars – more than all of US stocks combined. That’s hardly probable. On the other hand, if Bitcoin were to triple, it would have the market cap of one of the biggest US stocks, such as Meta – and that’s quite realistic.
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Nothing can protect us from inflation, even gold.