The Family Office & Gold
Generational wealth should be managed with reverence and with the purpose of preserving and enhancing the assets for future generations. Due to a century of money printing (starting with the creation of the Fed in 1913), most investment assets such as stocks and property have risen significantly in the last hundred years. This has created considerable private wealth. The current fragile state of the world economy, with both most major sovereign states and the financial system being virtually bankrupt, will make it extra difficult to preserve this wealth. In meetings with Family Offices in the last couple of years, we have found that there is too much weight on short term strategies and performance rather than the protection of wealth.
In our recent presentations at major Family Office Conferences, it was clear to us that many managers of major family wealth are very much focused on traditional assets such as stocks, bonds and property. Few managers realise that in real terms, measured against gold (money that can’t be printed), commercial property as well as the stock market have declined 75-85% in the last 10-13 years. These assets were inflated by money printing and the credit bubble in the last few decades. They are likely to continue their major under-performance in real terms.
Our meetings with Family Offices have also revealed that very few have any significant holding in physical gold. This is particularly surprising since throughout centuries wealthy families have always held an important part of their assets in gold.
Why Gold for the Family Office Portfolio?
The key is not whether MAM is correct or not in its assumptions. What is more important for Family Office managers is to protect against the eventuality of either scenario happening. To hold physical gold would be a responsible insurance strategy against either event and the chart on the left is only partial proof.of risk transfer between asset classes.
“Gold is the ultimate AAA investment”
Physical gold stored outside the banking system is the ultimate form of wealth preservation. It protects investors against both a potential deflationary implosion and inflation/hyperinflation. It also gives investors “insurance” against counterparty risk and is likely to enhance returns substantially.
GoldSwitzerland can provide Family Offices with protection for a relevant percentage of their assets. GoldSwitzerland has a pricing offer for Family Offices that competes favorably with any other method of acquiring gold. Please contact us for details.