'Gold is insurance, not an investment'

Published April 20, 2013

Gold is insurance, not an investment

Mauldin says if prices go down, he gets to buy more of the metal
By cai haoxiang

One reason investors hold gold is to have a store of value in case people lose faith in printed money due to rampant inflation. - PHOTO: REUTERS

JOHN Mauldin buys some gold coins every month as "central bank insurance", and gold comprises about 5 to 10 per cent of his assets, he said.

If prices go down, that just means he gets to buy more, he said, in response to a question about gold's sudden price plunge in the past week.

"I never intend to sell my gold. Gold's not an investment, gold is central bank insurance. I have health insurance, I never want to use my health insurance. . . At the end of the day I hope that gold goes back to US$200 (an ounce). I hope that my gold becomes worthless," he said.

"And 100 years from now I give to my great grandkids and they say, papa John, why did you go buy gold coins? And I can just say well I was silly back then, we always grew worried about our central banks. But I buy today because I don't trust them. And I don't think I will ever need that gold but just in case."