Early this week I appeared on a panel discussing gold at the world’s largest exchange traded fund (ETF) conference, which took place in Hollywood, Florida. Given that the conference was being held in a picturesque setting on the beach, there were plenty of opportunities to be distracted by sun, surf, and sand. (Full Disclosure: My two favorites were the Lotta Coladas, and other tropical smoothies, and an early morning kayak in the Atlantic.) But the real action was inside the conference, where 1,200 attendees piled in to hear the latest on the economy, bonds, commodities, gold, and all things new in the world of ETFs.
We have long used ETF securities in our Pinnacle portfolios, since they allow us to easily rotate diversified asset classes and sectors, and have low expense ratios, tax efficiency, and intraday trading capabilities. The market for ETFs is exploding right now, with roughly 4,000 registered globally and over 1,500 in the U.S. alone. The structures have changed dramatically over the years, which allows for more asset classes, but adds complexities that require the research of qualified analysts.
Some major names spoke at the conference, and it was interesting to take the temperature in the room at different investment presentations. The macro panel had an optimistic tone, and famous trader Dennis Gartman was as bullish as he’s ever been on U.S. stocks, with a forecast for 1650 on the S&P (as long as politicians don’t spoil the party with tax increases). The bonds panel seemed like a repeat of the one that appeared last year, where most panelists believed that yields couldn’t go any lower. (It was funny that no one asked them how the entire market missed a great year for bonds just one year ago.)
In the panel I appeared on, we debated whether gold was in a bubble or not. Most of my fellow panelists were structurally bullish on gold and didn’t think the word bubble applied. I had fun playing the villain, and though I wasn’t bearish on gold outright, I did remind them that the metal has returned 19% annualized over the last decade, and exhibits many of the elements of a bubble. My ultimate point was that a little gold still provides a hedge an some diversification, but that investors looking for a repeat of last year’s returns might be disappointed.
All in all it was a great couple of days, and I hope that IndexUniverse will have me back next year to speak on another market related topic. I’d be happy to head back to Hollywood, especially if they’re mixing up more of those Lotta Coladas.
Copyright: FMNG / 123RF Stock Photo