Wednesday, June 2, 2010

Rothschilds Ups Overweighting In Gold

According to a summary report from Citywire, Rothschilds Private Banking & Trust's head of investments Dirk Wiedmann has increased his overweighting of gold in his recommended portfolio. Although noting that base metals have deflated to the point where they're trading near their fundamental values, he has little to say for any other asset class besides gold. His case for gold, in a nutshell, is
short-term fixes for long term problems as a key headwind facing the global economy.

'The cracks in the financial system have been papered over and may not become critical for some time. Crucially, central banks will do all they can to prevent another recession. Policymakers will focus on short-term fixes and try to muddle through,' Wiedmann said.
Rothschilds is the only major wealth-management institution I know of that's recommending an overweight in gold. The others seem content with a 5-10% portfolio-insurance allocation.

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