Millennials get a bad
rap for killing a whole bunch of Industries, cable television,
landline phones, department Stores. But there's actually one
super old industry that seeing a Big bounce from the millennial
generation. In fact, it's so old That it goes all the way back to
ancient Egypt are talking about Gold, millennials actually hold
the largest allocation to gold In their portfolios. When
compared to other generations, Investors in that demographic
hold an average of 17% of their Portfolios in gold. That
compares to about 10% for baby Boomers according to State
Street data from 2023. And so Far in 2024, gold has been a
pretty solid bet all generations Younger generations included
very wisely see gold and Bitcoin And other assets as all under
the same thing. They're always To make money trading always to
make money investing, and They'll go where the action is.
And right now the action isn't Gold. So what's behind the
sudden interest in gold? And why Is Costco of all places having
trouble keeping these small gold Bars on store shelves? First, why invest in gold at
all? Well, most financial Advisors say gold does have a
place in investment portfolios, But a pretty small one, gold is
often seen as a hedge against Inflation and against economic
downturns. Gold really does Well, when the economic times
are quite hard. So it's not Something I still have to Oh,
it's gonna make me so much Money. It's just something I
saw. That's going to keep value Of my money while things are
going on, but is gold a good Investment compared to the
benchmark s&p 500 index? This is A chart showing spot gold prices
from the past year compared to The benchmark s&p And as you can
see, in the past few weeks, gold Prices have pulled away from the
stock market. In terms of Returns over the long term
though the stock market has Handily beat gold as an
investment zoom out even further And gold has vastly
underperformed the wider stock Market. The economy too has been
doing pretty well in recent
Years. Despite persistent
inflation wage growth is up and The job market remains strong
interest in gold as an Investment class has risen in
recent years since its peak Going back to the 2008 financial
crisis. This is a Gallup poll Showing Americans perceptions of
the best long term investments. As of May 2024. stocks and
mutual funds beat out gold, but Only by a few points in 2023.
Gold's perception as a good Investment was higher than all
other asset classes, with the Exception of real estate by
spring 2024. Though investors Favorite stocks and mutual funds
more so than gold, I think you Are seeing buying play across
all demographics spectrums Letter older people also like
buying gold because they worry About inflation. The younger
generation has a different tech, They see an asset that's
working, and they want to get Involved. And they know that
when a stock or any asset makes A new high, it's a signal that
something has changed something Is new, so they're spotting the
trend from a price standpoint, And the underlying fundamentals
support that point of view a Lot. People have gotten so
interested in gold that Wholesale giant Costco began
selling these 24 karat gold bars And its stores. The bars are
small, weighing one ounce each But still Costco was having
trouble keeping them on store Shelves. Wells Fargo estimates
that Costco was making between 100 and $200 million per month
selling these gold bars. Costco Reports its next quarterly
earnings results on May 30. And So at that point, we'll get a
peek on how much money they're Actually making on gold. Whether
gold prices continue to rise Both in the commodities market
and on Costco checkout aisles Has a lot to do with the US
Federal Reserve gold prices got A big boost when the latest
inflation data came out and gave Investors hope that the Fed
would cut rates soon. And that's Because gold prices usually go
up when rates go lower. It's Made me think it's a great buy.
But then I also know that's not How life works in terms of
finance. Just because something
Is soaring now doesn't mean they
will always soar.
