Bullion not contracts. Rebalance into/out of 2%. The 100 year avg annualized return on gold is a meager 0.7%. ie < a tenth the equity risk premium. It doesn't shoot up nearly as dramatically during market panics as many expect if the USD is strong. Still a useful insurance allocation at 2% -but if you want an insurance instrument for a prolonged recessionary bear buy a managed futures ("CTA") hedge fund or, now conveniently, ETF. These did +26% during 08-09. I'd hold this more towards 5% of your total ptflio rather than gold at 5.
I should also have been clearer. Gold is usually 5% of my trading portfolio, not total investment portfolio, so around ~.5%-2% of total. I only passively managed my 401ks and Roth 401k.
I'm down to about 1/3rd my usual holding since I sold off most of it when it peaked above $1,300 since I was up about 20% at that point.
SR, what managed future ETFs would you recommend?
Also I think some good points have been made by everyone around the WFC scandal, let's get back to investing shall we?
At this point I'm nearly out of contrarian plays. I've selectively reentered some REITs as the yield curve has steepened. I'm positioned in shipping and debating if I want to increase my position. It's the only industry with fairly durable cash flows that I see as currently cheap. Thoughts?
I also pick up selective market exposure through XIV and ZIV whenever VIX spikes.