The wealthiest people on earth have always had an intense desire to heavily invest in gold. A wide range of the smartest and richest investors have always kept gold in their portfolio because they recognize the tremendous value. This is true amongst traditional investors that tend to scoff at gold’s potential upside.
Nevertheless, a number of billionaires in recent years have started investing massive amounts of money in gold. They’ve purchased such large amounts of gold that their overall investments are bigger than the economies of numerous countries throughout the world.
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3 Billionaires Who Have Invested Large Sums of Money in Gold
Very recently, a handful of the biggest investors in the world have started sinking millions upon millions of dollars into gold investments. And in the case of Egyptian businessman Naguib Sawiris, he’s actually investing billions of dollars of his net worth into gold investments.
Here’s a quick rundown of three billionaires who’ve invested in gold:
- Warren Buffett – $564 million
- Ray Dalio – $400+ million dollars
- Naguib Sawiris– $4.2 billion
And believe it or not, these aren’t the onlybillionaires who decided to invest a large portion of their overall wealth in gold. They recognize the value of this asset and have decided to protect and preserve their wealth in today’s difficult economy.
Why Are Modern Billionaires Investing Large Portions of Their Overall Portfolio into Gold?
Some people believe billionaires invest in gold because it’s another asset class for them to access. Other more intelligent people realize that the smart billionaires are investing in gold for many other reasons.
Some of those reasons include:
- Market volatility is increasing exponentially in this tough economy and wealthy investors need stability during unstable times, which gold provides.
- Gold has been a valuable commodity throughout history and it remains a special store of value to this day.
- Owning physical gold is a great way to hedge your bets against inflation and deflation as well.
- Putting gold in your portfolio is a great way to add additional diversity amongst your investments and billionaires recognize this fact too.
- When macroeconomic and geopolitical uncertainty rear their ugly heads, Gold can provide financial value and protection.
- There is a huge market for gold investments which make it a liquid yet finite asset.
As you can see, billionaires understand just how important it is to add diversity and inflation protection to their portfolio. Those reasons alone are very important to the wealthiest people in the world.
To better understand this point, let’s look at the reasons why billionaires invest in gold in greater detail.
Market Volatility
We see massive volatility in the markets every day and it’s becoming difficult to predict market trends. The wealthiest of investors want stability, not volatility. They want predictable and inspected returns on their investments, which they get by investing in gold and other precious metals.
Suffering through a major market crash could damage anyone’s portfolio, but it can significantly harm the portfolios of billionaires. In fact, a crashing market could erase a large portion of their overall wealth, so adding gold to the portfolio provides excellent protection.
Middle class investors would be wise to follow the same strategy. If the market crashes imminent – like the one we’re experiencing right now – it’s time to move your money out of the market and into safe, predictable, and diversified gold investments.
Historic Value
It shouldn’t surprise anyone to learn that gold has been historically valuable throughout the millennia. People have been using gold to store wealth entry for goods and services for thousands of years.
Guess what? Gold has maintained its ability to store value to this day. In fact, gold has never been more valuable than it is right now.
Hedge against Inflation
Gold has made a phenomenal hedge against inflation. Why? When the cost of living increases, the value of gold tends to rise along with it.
Within the last 50 years, the price of gold has soared. But it has particularly done so at times when the stock market would plunge. This usually happens during high-inflation years.
As Fiat currencies lose their value and the purchasing power due to inflation, gold is typically priced accordingly and its value will rise along with the inflation.
Portfolio Diversity
The most important aspect of portfolio diversity is finding assets that aren’t particularly correlated closely to one another. From a historical standpoint, Gold’s correlation to the stock market and other financial instruments is negative, which means it’s truly a diverse product and history has proven it.
- The value of gold skyrocketed in the 1970s but stocks suffered.
- The value of stocks skyrocketed in the 80s and 90s but gold suffered.
- The stock market crash of 2008 saw numerous investors moving their assets into gold and its value took off.
By adding the proper level of diversity to your portfolio through investing in bonds, stocks, and gold, you’ll limit your overall risk and protect against market volatility.
Geopolitical Uncertainty
Gold is a great investment because it can retain its value during times of financial uncertainty. Yet, it’s even better because it has the ability to retain value during geopolitical young certain times as well. Many people call gold the crisis commodity, because investors flee to its safe harbors when tensions around the world begin to rise.
Massive Liquidity
The gold market is big and it’s only getting bigger. Investors can quickly and easily sell off their gold assets if they need cash in a crunch. Billionaire investors like Warren Buffett recognize this highly liquid asset as a safe investment vehicle as they can quickly sell whenever they choose to do so.
Final Thoughts
Clearly, billionaire investors recognize the value of gold and the protection that this asset class provides. When geopolitical uncertainty, market volatility, and financial uncertainty rear their ugly heads, gold is there to keep portfolios safe, protected, and quite healthy as well.
Do yourself a favor and begin investing in gold as soon as possible. You’ll get to experience all of the wonderful benefits just like today’s top billionaire investors.
About Tim Schmidt
Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started IRA Investing to share his expertise in using his Self-Directed IRA for alternative investments. His views on retirement investing have been highlighted in USA Today, Business Insider, Tech Times, and more. He invested with Goldco.
