Sam was asked by the Kansas City Star to weigh in on the prospects of gold as an investment amid it’s rise to all-time highs in 2011. As students of economic history, the firm often attempts to put recent events into perspective. Interestingly, the firm’s analysts decided to compare what were perceived to be “overpriced” assets in June 2006 (real estate as an investment), in 2011 (gold as an investment), and in July 2012 (farmland as an investment).
After 2008 and with the prospect of central banks printing money at unprecedented levels, Sunrise Advisors incorporated a unique feature into the construction of their portfolios. This allocation philosophy, coined by the firm as “foundation investments”, is utilized to enhance one’s purchasing power through periods of inflation and/or deflation. The foundation of your distribution strategy is likely the currency in which you will spend your assets (for most of us, that would be U.S. Dollars). The specific allocation to various investments will be largely dependent upon the trend in currency valuation or purchasing power. It is the goal of the “foundation investment” portion of the portfolio to be in line with inflation or deflation.
To view our thoughts on gold in 2011 (and our long-term view toward stocks), please see the article here.