Latest / Best of Business / Sam Dickie: Fisher Funds expert on the case for investing in gold in 2025

Transcript

Sam Dickie: Fisher Funds expert on the case for investing in gold in 2025 · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks'd be follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: Gold is having its strongest years since the nineteen seventies.
• 0:19
  Speaker 2: What a statement. A up sixty percent so far? This here? Now,
• 0:22
  Speaker 2: what's driven this incredible rise is the question, and of
• 0:25
  Speaker 2: course should you invest in it? Sam Dickey from Fisher
• 0:28
  Speaker 2: Funds is with us. Hello, Sam, you know what is
• 0:31
  Speaker 2: the investment case here for gold?
• 0:34
  Speaker 3: It is on fire, up one hundred and fifteen per
• 0:36
  Speaker 3: cent of the pass eighteen months or so. So there's
• 0:38
  Speaker 3: three primary investment cases. The first and foremost one is
• 0:42
  Speaker 3: it's a safe haven head, so it's got a near
• 0:45
  Speaker 3: perfect hit rate of not only holding its value, but
• 0:49
  Speaker 3: often appreciating value in stop market correction, So the eighty
• 0:52
  Speaker 3: seven crash, the GFC crash, the European Financial crisis crash,
• 0:57
  Speaker 3: and various other corrections, gold would almost always go higher.
• 1:01
  Speaker 3: And that's because simplistically, it carries no credit risk, it
• 1:05
  Speaker 3: can't default, it holds its value and that becomes almost
• 1:08
  Speaker 3: self fulfilling. So investors pile into gold in times of uncertainty.
• 1:11
  Speaker 3: So that's the first one. The second one is it
• 1:13
  Speaker 3: is considered an inflation hedge, albeit it its track record
• 1:18
  Speaker 3: there is a bit more patchy, so the assumption goes
• 1:20
  Speaker 3: Unlike fiat currency, central banks can't print any more gold,
• 1:24
  Speaker 3: and while inflation erodes the purchasing power of fiat currency,
• 1:28
  Speaker 3: gold is a stable store of value and the third
• 1:30
  Speaker 3: one is a little bit more bearish. So central banks
• 1:34
  Speaker 3: and investors buy gold to diversify away from the US dollar.
• 1:38
  Speaker 3: And twenty twenty five has been one of the weakest
• 1:41
  Speaker 3: years for the US dollar in the past couple of decades.
• 1:44
  Speaker 2: Now, how does the current period then compare to the
• 1:46
  Speaker 2: nineteen seventies.
• 1:49
  Speaker 3: Yeah, it cast in the mind back but definitely similar
• 1:52
  Speaker 3: some similarity, so like now, investors had lost a bit
• 1:55
  Speaker 3: of confidence in the US dollar. Back then it was
• 1:57
  Speaker 3: because of persistently high inflation. They couldn't get a handle
• 2:01
  Speaker 3: on inflation, unsustainable US government spending, and then of course
• 2:04
  Speaker 3: throwing an oil shock there for good measure too. Today
• 2:08
  Speaker 3: inflation is a little bit stubbornly high, but not anything
• 2:12
  Speaker 3: like that was the problem back then. Today they've lost
• 2:14
  Speaker 3: a bit of confidence in the US dollar because of
• 2:16
  Speaker 3: high US government debt levels, which you and I have
• 2:19
  Speaker 3: spoken about before, and volatile policy decision making, so investors
• 2:23
  Speaker 3: are piling into gold is a more stable alternative. And
• 2:26
  Speaker 3: back then, if you think about the circuit breaker, it
• 2:29
  Speaker 3: was Paul Volka hiking interest rates to twenty percent to
• 2:32
  Speaker 3: break the back of inflation, which restored confidence in the
• 2:35
  Speaker 3: US dollar and pop the gold bubble. The circuit breaker
• 2:38
  Speaker 3: today could be a bit of austeria in the US,
• 2:41
  Speaker 3: some really sensible and prudent management of the government balance sheet.
• 2:45
  Speaker 3: But the problem is, and again you and I have
• 2:47
  Speaker 3: talked about this, no democratically elected government wants to be
• 2:50
  Speaker 3: the one to remove the punch bowl from the party.
• 2:52
  Speaker 3: They don't want to crack down on government spending.
• 2:55
  Speaker 2: Yeah, so what does all of this mean for investors?
• 2:57
  Speaker 3: Then? I think it can be a really helpful hedge
• 2:59
  Speaker 3: in a diversified portfolio, particularly as a safe haven hedge.
• 3:03
  Speaker 3: But this time it's had a really powerful run already.
• 3:06
  Speaker 3: And the tricky thing is it's really hard to value,
• 3:08
  Speaker 3: so it doesn't yield anything. It doesn't produce any income,
• 3:11
  Speaker 3: unlike a share or bond or property. And as Warren
• 3:14
  Speaker 3: Buffett said, the best gold gets dug out of the ground.
• 3:17
  Speaker 3: We melt it down, dig another hole, bury it again
• 3:20
  Speaker 3: and pay some stand around guarding it so it has
• 3:23
  Speaker 3: no utility in anyone watching from Mars would be scratching
• 3:26
  Speaker 3: their head.
• 3:26
  Speaker 2: Yeah right, thank you very much, Sam appreciate it. Sam
• 3:29
  Speaker 2: Dickie Official funds. It's twenty one away from seven.
• 3:33
  Speaker 1: For more from News Talk set B listen live on
• 3:35
  Speaker 1: air or online, and keep our shows with you wherever
• 3:38
  Speaker 1: you go with our podcasts on iHeartRadio