When The Gold Dust Settled

With 2022 behind us, it is our duty as investors to re-evaluate our decisions, learn, and add new tools to our toolkit. Most holiday party conversations have probably been centered on growth equities getting crushed and bonds having their worst year in memory. Put the two together and the typical 60% stocks/40% bonds portfolio has had a truly miserable year.

But there were areas where one could find protection. As many of my readers know, my investment landscape consists of not only stocks and bonds, but also gold. I urge everyone to read one of my first articles from this past year before going further (Small Data Sample Shows Big Potential (forbes.com). In this piece I took a quant approach to 50 years’ worth of fed tightening cycles, coupled with macroeconomic regimes, and what our proprietary models at Proficio Capital Partners predicted for asset class returns. I then layered this analysis with one of two paths for the fundamental direction of the economy (will Powell turn into Volker 2.0? or will he take his foot off the gas early?). I came to the conclusion that gold would prove to be a great hedge to equities or have strong absolute performance.