I’ll give you a hint. It’s not stocks.
If you can’t read the tiny lettering above, the asset class is the barbarous relic, gold.
Why is gold out performing?
Could it be that Europe continues to implode and Germany now looks like it will confront a fairly nasty recession?
Could it be that the “fiscal cliff” is now just a bit too close?
Could it be that Obama was re-elected?
Could it be that with the Obama re-election, Bernanke will be that much freer to continue operating with abandon?
Gold is out performing because of all of these things, plus a few others. The financial cumulonimbus clouds continue to gather and funds, governments, even retail investors are looking for shelter from what may be a very nasty storm in the relatively near future. A storm which could even overwhelm treasuries.
That’s crazy talk though right? Frankly, I hope so. But do YOU continue to consider treasuries a truly “riskless” asset any longer? (If you ever did, and I’m not talking just about inflation risk.)
Gold is one of the few ways investors can hedge against the rampant crony capitalism which defines much of the economic world these days. It is a check on (though not a total cure for) the current economic insanity we are witness to. It is one of the reasons the Federal Reserve hates the yellow metal.
Saying that, how much do you want to bet that Bernanke has a little (or perhaps not so little) stash of gold somewhere?