Bob Graham – President, Riggs Asset Management Company

Hi there, I’m Bob Graham, President of Riggs Asset Management Company. Today I want to talk about one of my favorite asset classes: gold.

We’ve owned gold off and on in our portfolios for more than 30 years, and we do that for several important reasons. First, gold can be a great hedge against inflation or market concerns. It can also serve as protection during periods of geopolitical uncertainty.

If you look back over the last year, for example, we’ve owned gold for about 18 months to nearly two years now. Interestingly, last year gold actually outperformed the stock market.

I know there’s been a lot of discussion about advances in technology—especially artificial intelligence—and what’s happening in that space. As you know, we’re heavily represented in those areas as well. But in a very quiet way, gold actually outperformed the U.S. stock market.

In fact, if you go all the way back to 1971, when the United States first came off the gold standard, gold and the stock market—measured by the S&P 500—have performed almost identically. If you had owned both gold and the S&P 500 since then, you’d find that gold has actually slightly outperformed.

So what’s driving gold today? Why is gold hitting new all-time highs?

We think there are a couple of key reasons.

First, there are increasing concerns about geopolitical events around the world. At the same time, people are concerned about inflation, not just in the United States but globally—in Europe, Asia, and Latin America. The entire world is experiencing inflationary pressure, and gold tends to benefit from that environment.

Another major factor is the significant increase in gold purchases by central banks around the world. Central banks have been adding gold to their reserves as a way to hedge against risks—whether those concerns relate to the U.S. dollar or other financial uncertainties.

Regardless of the exact reason, the demand for gold is clearly rising.

Looking ahead, we believe there is a strong possibility that gold will continue to move higher. We think it may not only reach new highs—like it recently did—but continue trending upward.

Gold can act as a hedge against inflation, a hedge against geopolitical events, and most importantly, a store of value within a diversified portfolio.

Right now, we like gold. We like other areas as well, but we believe gold occupies a unique position that is currently benefiting our portfolios.

If you have any questions about this topic—or any other financial questions—please reach out to your Riggs team. We’re always here to help.

I hope you found this helpful, and I look forward to talking with you again soon.