How much gold should investors hold

You often hear "You need to own gold!" But how much is the right amount?

You don't want to own too little gold and have the purchasing power of all your savings shrink dramatically. You can't afford that. But you don't want to be an end-of-the-world nutcase either.

Well, one of the world's shrewdest investors – Jean-Marie Eveillard – has 10% to 12% of his extremely successful investment fund allocated to gold and gold plays.

Jean-Marie Eveillard's First Eagle Global Fund beat the stock market every year this decade. What's more, he's done it conservatively. He doesn't take big risks. Over 30 years, he's proven to be one of the most successful mutual fund managers ever.

So what's Jean-Marie Eveillard recommend buying today?

"After equity markets have gone up 35%-40% or more over the past three months, ideas that are immediately appealing are few," he told Bloomberg news today. But he did have one big idea ... gold.

Right now, his fund is about 10% invested "in gold and gold mining securities," he said.

His explanation is simple: "It's insurance to protect against the fact that current policies by the American government and the Fed are potentially wildly inflationary."

Jean-Marie likes gold because he expects the Fed will leave interest rates near zero for a very long time.

The Fed will "stay pat until the politicians give them the green light to raise rates, which will take quite a while. As long as unemployment is very high, politicians will be reluctant to push up short-term rates."

When I got into investing nearly 20 years ago, Jean-Marie was already a legend. After doing my homework, his First Eagle Global Fund was one of the very first investments I ever bought (Back then, it was called the SoGen fund – it still uses its old symbol, SGENX).

Jean-Marie started managing the fund in 1979. If you had invested $10,000 in the fund back then, it would be worth roughly $500,000 today (Heck, I should have kept my money in there)!

His "big idea" now is very simple. Gold pays no interest. And money in the bank pays nearly no interest. You can print money. But you can't print gold. If the Fed keeps interest rates near zero for the foreseeable future, the obvious outcome is that it will take more slips of paper (dollar bills) to buy an ounce of gold.

He believes his clients' money should be about 10% or so allocated to gold and gold investments. What's right for your situation? That's up to you. But if you're substantially under or over the legendary investor's gold allocation, then you ought to consider getting more in line with him.

ABOUT THE AUTHOR

Dr. Steve Sjuggerud, DailyWealth

DailyWealth is free daily investment newsletter focused on the best contrarian investment opportunities in the world. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments. http://www.dailywealth.com/

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SKorea braces for possible 3rd nuke test by North/APsource: NKorea may be prepping new nuclear testWASHINGTON (AP) - North Korea may be preparing for its third nuclear test, ashow of defiance as the United Nations considers new sanctions on thedictatorship for conducting an underground nuclear explosion in May, accordingto a U.S. government official. North Korea conducted an underground explosion on May 25, its first since a2006 atomic test. The official, who spoke Thursday on condition of anonymity inorder to discuss the unreleased information, would not provide details regardingthe assessment. A draft U.N. resolution proposed Wednesday would impose tough sanctions onNorth Korea's weapons exports and financial dealings and allow inspections ofsuspect cargo in ports and on the high seas. North Korea has threatened toretaliate if new sanctions are adopted. North Korea already is a pariah to many countries and has been under tougheconomic sanctions for years. Last month's report

frankseles

The US Government, like any other in the world, believes that the only way to emerge from a recession is to print money and spend it. A recession in their definition is a lack of demand from the consumers owing to mysterious reasons. Hence, if the government can spend loads of money and stimulate the demand, it can wake the consumers out of their sleep..they should hve gave everyone one million dollars..Either way the goverment in America is not that powerful to handle these economic issues (and many times more hurtful than helpful), for telling someone what to do rarely works, and forcing them certainly will fail. ALl they could reasonable do is try to give incentives... public works projects, or as you said print more paper, but if for example the Government refuses to let the banks foreclose on houses even though they own the lein, or makes the collective pay so people don't lose their house -THEN GOLD IS HEADING TO TEN THOUSAND.US OWNS 65 TRILLION IN DEBTS GIVE US ONE MIILION I SAY

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Oil price leaps to year's highPredictions of $250 a barrel on fears for oil reserves, hopes of economic recovery and hedging against weak dollar The price of oil burst through the $71 a barrel mark today amid revelations that proven reserves had fallen for the first time in 10 years and predictions that the price could eventually hit $250.end of..............................year 2009

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SAN FRANCISCO (Reuters) - California's government risks a financial "meltdown" within 50 days in light of its weakening May revenues unless Governor Arnold Schwarzenegger and lawmakers quickly plug a $24.3 billion budget gap, the state's controller said on Wednesday. Underscoring the severity of California's cash crisis, Controller John Chiang, who has previously warned the state's government risks running out of cash without a budget deal, said revenues in May fell by $1.14 billon

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more like %90....over $3.7 billion in new gold positions during the first quarter of 2009, increasing its total investment to $4.3 billion. About 46% of the equity portfolio is now allocated towards gold and gold stocks. Not familiar with Paulson & Company, or founder John Paulson? You should be, and here's why- http://caseyresearch.com/displayCcs.php?e=true A significant quantity of gold, silver, and other precious metals is unaccounted for at the Royal Canadian Mint. External auditors are investigating a discrepancy between the mint's 2008 financial accounting of its precious metals holdings and the physical stockpile at the plant on Sussex Drive in Ottawa. The mystery raises possibilities from sloppy bookkeeping to a gold heist. Read more here-http://www.gata.org/node/7470 or http://www.ottawacitizen.com/Business/Mint+account+missing+gold/1656084/story.htmlStock prices fell 90% in the Great Depression and this time around it could be even worse and he felt that the housing price

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