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I’m a huge fan of Ray Dalio and his philosphy. I loved his book (see below) and am eagerly awaiting his second one. I gobble up every video I can find from him explaining his views of the market, on work, and on life.
This video shows Ray talking about his views on gold and that there is always a place for gold in a portfolio as a diversifier. I don’t like gold one bit because I just don’t understand how it has any value to an investor, and I think the typical gold theory that it is a hedge against uncertainty is a bunch of hogwash. HOWEVER, I am not a market expert and thus am trying to figure out if there is a gold income vehicle that would be an important piece of the MIP Portfolio.
The mission of this portfolio is to generate the most income, maintain capital, and have the lowest risk through low correlations possible. With the high level of income being reinvested into the most opportunistic areas at the time, compounded returns are to surpass the market over time. This is what I want to develop here with this blog.
So the question here is can gold play a part. SPDRS Gold ETF (GLD) is the most popular gold ETF, but it doesn’t pay an income. I could hold it and sell covered calls on it, however I would prefer to find a fund that has the scale and expertise to optimize the strategy. So I’ve stumbled across the Credite Suisse X-Link Gold ETN (GLDI) which sells covered calls, however I can’t tell how well it actually correlates to gold price movements over time. So I don’t know if this is a plausible vehile either. If you look at a chart of this… it is ugly. Since inception it has decreased over 50%.
Does any one know of a closed-end fund (CEF) that may be an income producing vehicle on gold? Or should gold just be forgotten completely.