By: Maria Wiliams
Gold has always been treasured for its timeless value. It has been the go-to currency and ultimate symbol of power for centuries, with its rarity and shine making it an ideal medium for trade. However, the world moved toward paper money and central banking after the Second World War—a time when fixed exchange rates were needed and more flexibility was desired—two things the Gold Standard couldn’t provide.
It was in the 1970s when the direct conversion between gold and the dollar ended. President Richard Nixon initiated this move to address the international issue of a potential gold run and the domestic dilemma of inflation. The aftereffect of this decision was called the Nixon Shock, and aptly so, given it completely changed the global finance landscape.
Gold then entered a phase of fluctuating prices and uncertain demand. Investors started questioning its relevance in an era where paper money and digital transactions dominate. Still, it’s worth noting that gold’s role in economies and financial systems changed over time, but its status as a symbol of wealth and prosperity remains.
In fact, it held onto its reputation as a safe asset, a shield against inflation, and a reliable store of value during economic storms. The pivot toward gold investment has even yielded substantial returns in recent years. Regardless, this prompts the question: Is gold still a wise investment in the modern economy?
There appears to be no straightforward answer to this query, as investors find themselves at a crossroads. The price of gold has surged past $2,300 an ounce. Some foresee a bursting bubble, which indicates an impending correction. Meanwhile, others predict its rise, viewing the tangible asset as an indispensable hedge in an uncertain economic climate.
Fortis Portfolio Solutions, a firm renowned for its growth investment strategies, believes that the market corrections of 2021 and 2023 are excellent reminders of financial markets’ inherent volatility. In 2021, the COVID-19 pandemic triggered a sharp downturn, followed by a recovery fueled by fiscal and monetary stimulus measures. However, the elation was short-lived. The concerns over inflation and interest rate hikes began a correction in 2023. Investors were then forced to reassess their portfolios.
The Illinois-based company raises another question: Could the ideal investment be hiding in plain sight, disguised as the “fool’s gold”? It asserts that given the current landscape, it’s worthwhile to consider base metals like copper, zinc, and aluminum as viable investment opportunities. With the economic recovery in China, the world’s largest consumer of commodities, as well as the ongoing conflict in Ukraine, it seems base metals showcase immense potential for growth.
Fortis champions an approach that entails diversifying investments into base metals such as copper, zinc, and aluminum while still focusing on gold assets. “We developed this strategy to capitalize on opportunities emerging given the changing landscape. Since we make sure to stay ahead of market trends and assess geopolitical dynamics, our mission is to help our clients adapt investment strategies accordingly,” Founder Meridith Hutchens supplies.
The company’s team of experts helps advisors explore innovative strategies that would help their clients navigate market volatility to the best of their abilities. This dedication illustrates Fortis’ passion for upholding its investment philosophy centered on controlling risk without sacrificing performance.
The forward-thinking firm leverages research-driven methodologies that combine technical and fundamental analysis to guide investment decisions. The technical analysis revolves around looking at price movements and volume data to interpret market psychology, which is significant in predicting future activity based on historical patterns. Meanwhile, the latter delves into economic indicators, industry conditions, and company financials to assess the value of an asset.
Fortis assists with risk-conscious strategies to avoid underestimating risk (both theoretically and technically) and targeting dollar exposures instead of risk exposures. It’s worthwhile to emphasize that the company remains proactive and dynamic in its portfolio management approach. In addition, they ensure portfolios are consistently aligned with market conditions. Doing so allows it to empower advisors with clear, confident directions for their clients’ investments.
Fortis Portfolio Solutions empowers investors and advisors to answer whether “Fool’s Gold” holds vast potential like traditional gold investments. Its dynamic investment strategies and proactive portfolio management approach enable it to provide investors and advisors with the tools and insights needed to assess the true value of base metals versus gold, guiding them toward informed decisions to fulfill their financial goals.
Published By: Aize Perez
