George Milling-Stanley, the chief gold strategist at State Street Global Advisors, recommends that investors choose physical gold over gold stocks to protect themselves in a volatile market. Gold mining stocks tend to move in correlation with the equity market, so they may not provide the same level of protection as physical gold. State Street Global Advisors offers two exchange-traded funds (ETFs) that track the performance of the spot price of gold: the SPDR Gold Shares ETF (GLD) and the SPDR Gold MiniShares Trust (GLDM). The funds have different gross expense ratios, with GLD at 0.40% and GLDM at 0.10%, attracting different types of investors based on their trading preferences.
GLD is recommended for investors who want to trade frequently or be tactical players due to its liquidity and low trading costs after 20 years in the market. On the other hand, GLDM is more suitable for investors who want to make a long-term investment in gold with a lower expense ratio. Both GLD and GLDM have seen their value increase by 15% year to date as of Thursday’s close. Milling-Stanley emphasizes that gold is no longer considered a “fuddy-duddy” investment, with younger generations such as millennials increasing their allocation in gold. Millennials and Generation Z are also investing in bitcoin, but Milling-Stanley believes that gold and bitcoin serve different purposes in an investment portfolio.
Although bitcoin may compete with gold for tactical investors looking to capitalize on price movements, gold remains a strategic asset for long-term allocation. Gold’s historical track record as a store of value and hedge against market volatility makes it a preferred choice for investors looking for stability in their portfolio. The popularity of gold among younger generations, combined with its performance in a volatile market, indicates its enduring appeal as an investment option. Milling-Stanley’s insights suggest that a balanced portfolio including both gold and other assets, such as stocks and bonds, may provide investors with diversification and protection against market fluctuations.
