Q: Have not held a gold stock in over 30 years. Quite frankly never made sense to me. However, with the huge amount of debt floating arounds, and, especially in the USA, I am wondering if it might make sense to buy AEM as a hedge: pay a dividend and appear to increase on a regular basis.
5i Research Answer:
We think gold can still serve a purpose in a portfolio, and like AEM for sector exposure still. Right now, with the strong US dollar, gold is having a tough time. But we would still consider the sector as 'insurance' in a portfolio, and typically (not always) it is less correlated to other assets. In 2008, gold was only one of two asset classes worldwide to rise in value (the US dollar was the other).