KERNSTRATEGIE
PRECIOUS METAL PORTFOLIO SECURITY
Intelligent Security
“The important thing is not to predict the future, but to be prepared for it”
The monetary policy response to the 2008/2009 global financial crisis, as well as the subsequent turbulences in the Eurozone until today, show: Printing “digital” money is a common way for central banks to survive economic shocks without really addressing their causes.
The consequences for individual wealth preservation and its risk-known increase can hardly be overestimated. One does not have to look far for an alternative. It was precisely the demonetization of gold in 1971 in the USA, and of silver before that, with which the global fiat currencies got rid of their anchor of value.
From an investors point of view, one of the most important reasons for an exposure in the precious metals sector is therefore the development of the worlds currencies against precious metals. The development of the major world currencies against gold over the last 120 years shows in what a short amount of time currencies loose the function ascribed to them as a store of value, mostly through inflation or a currency reform, not infrequently following wars. The historical benchmark for this erosion is gold. And it is precisely this function that explains its property as a confidence-creating anchor!
Opportunities and risks actively managed. No passive “buy and hold”.
The ever accelerating creation of liquidity since the financial crisis of 2008/2009 in combination with exorbitantly rising debt of states, companies and consumers raises the justified question of the stability of currencies in an urgent way again.
Since gold, silver, platinum and palladium have no counter parties risk, precious metal are a suitable strategic protection against expropriation in the form of inflation or deflation.
In lights of its characteristics, this raises the question of how gold affects the risk- return structure of a standard portfolio. A good diversification reduces the overall risk of the portfolio to achieve an expected return. It shows that gold is only positively correlated with commodities and can therefore make a huge contribution to risk optimization, especially in a portfolio without commodity exposure.
A performance comparison of gold and gold mining stocks also shows: whenever the gold prices have shown a longer phase of strength, mining stocks have significantly improved the yellow precious metal. This also applies to silver, platinum and palladium and the corresponding mining companies.
Lucrum Capital’s precisely metals portfolio security therefore aims to achieve your investment goals with a global selection approach using equities of companies whose main focus is the extraction of precious metals and which have disproportionately high earning potential. This counter- cyclical, medium to long- term strategy exploits the low to negative correlation of precious metals to traditional asset classes by means of promising equities, thereby further optimizing the risk return profile of previous portfolio investments.
A fully invested portfolio contains between 20 and 25 stocks, with the selected shares having a market capitalization of > ca 500 million CHF. Due to the index- independent stock selection, a comparative benchmark index is dispensed with. Stop prices for risk management are not used, instead, they are replaced by flexible stock sales or portfolio hedging decisions. For it is a case-by- case and active control of cash holding ratio that can fundamentally provide further elementary risk reduction contributions in this portfolio.
Lucrum Capital does everything in its power to ensure that you can combine the reduction of systemic and monetary risks with an opportunity for above-average asset growth over the long term with an asset management focus on the precious metals portfolio security.
But one can also say it with the words of the Greek strategist Pericles: “It is not the matter of predicting the future, but of being prepared for it”.