This WSJ article about precious metals hedge funds highlights a very dangerous idea that became all too popular in recent years - the myth that unproductive assets should be a major component of any portfolio. This became a very popular idea among big hedge fund names in recent years as
This idea became even more popular as many prominent people assumed that QE and its "money printing" would cause runaway inflation. Of course, they were not only misinterpreting how QE works, but they were misinterpreting how the monetary system works and that led them to construct their portfolios poorly.
To be fair, gold and
PragCap
Now, I don't mind a small stake in gold and there's even some logic behind such a position in a negative real interest rate environment, but be wary of anyone who's selling the idea that you should pile your savings into gold and silver. This has the potential to be a very dangerous way to construct a portfolio and in my opinion it's largely based on misunderstandings of the monetary system and the financial world more broadly.