MAILBOX – David Melvill’s assessment of the ‘golden’ BizNews Portfolio update

In a recent discussion on the BizNews share portfolios, Alec Hogg addressed the topic of gold investment, comparing insights from experts Piet Viljoen and Peter Major.

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By David Melvill

*My question – gold related*

Alec, I enjoyed your interview with Magnus Hystek and Piet Viljoen’s on their share portfolio challenge – it was most insightful. Furthermore, I know you took Piet’s counsel on *“putting 2% into cryptos.”* The portfolio has grown from 2% to 6% allocation – it has been a really good call.

Piet remains very bullish on his *“hard assets” allocation,* uranium, oil and especially gold, in his portfolio.

Forgive me for pursuing this matter of *gold as some “good insurance.”* I know Warren Buffett has been disparaging towards gold, might you break with the allegiance to him (and his investing philosophy) and follow Piet with a *small allocation to gold?*

*Alec’s response*

Gold is not a Warren Buffett thing, it is a *Peter Major “thing.”* Peter pointed out, “When you buy Krugerrands (KR’s) you buy gold and the rand.” Alec said, “Krugerrands have a good proven track record.” He added, “I would prefer to buy the *Gold ETF* launched by ABSA on the JSE. “You get the same exposure to gold.”

Alec added, “There are some people that like to hold the assets, as you would with property.” “For me the Gold ETF would be my choice.”

*“Piet is a smart man.”* “He is of the persuasion that the *“inflation argument”* is going to continue, that the *US has too much debt* and therefore inflation will be around for longer.” “Therefore you need hard assets as they do well in this environment.”

*My comment*

Alec is a *brilliant journalist,* he has become a *smart manager of money.* Probably because he is so well read and does excellent research.

His thinking on gold is spot on. I concur with him on acquiring the *gold ETF for a portfolio.* It is easy to acquire and trade it with the lowest costs. However, it does mean that you can never take possession of the gold. There is a saying that says, “If you do not hold it, you do not own it.”If you don’t have a share portfolio (or do) you would do well to *acquire the physical Krugerrands* rather. Yes, there is a risk of them being stolen from one’s home. That is why I offer my investors a free storage in my safe inside the best vault in Cape Town.