Matt Badiali Explains Why Gold Makes A Great Hedge Against Market Risks

Matt Badiali is an investment guru who specializes in helping people make money from natural resources like Brent crude, precious metals, and crops like marijuana. He lives and works in Delray Beach, Florida, and writes a financial newsletter, Real Wealth Strategist, that is available through the publishing house Banyan Hill.

He recently wrote an article where he talked about why gold is a good investment. Matt Badiali said to think of it as insurance against steep drops in the stock market. He wrote that as the United States stock market has gone up over the past six years the value of gold has declined because the two are correlated.

Knowledgeable gold investors know that this is what happens as the value of gold moved opposite of the stock market. It was doing its job declining in value, just like it will do its job the next time the stock market collapses. Matt Badiali says he owns gold because it is great to have when there is volatility in the stock markets.

Gold is accepted by many as a way to store value. It isn’t subject to rust or corrosion and it’s a beautiful thing to look at. It has held its value ever since someone thousands of years ago grabbed a chunk of it out of some stream bed. That is has declined in value recently is a good thing, he says.

He points to the height of the last financial crisis in 2008. The S&P collapsed by almost 40 percent in just that year. The value of gold, though, went up by 5 percent. The S&P 500 went down in value by 15 percent from the start of 2008 to the end of 2011. During that same time period, gold rose in value by 86 percent. To know more about him click here.

Matt Badiali says that if you don’t own gold now you should. The stock market has been very volatile recently with the S&P 500 down in value by 4 percent. Gold went up by the same exact percentage. It is easy to buy in different forms such as jewelry, coins, and on the stock market.