Why I Own Gold: “Brown-Out!"

[Teach]

Over the period of many years, I’ve held gold stocks as part of my portfolio.

In years past, I’ve held, as little of 2 or 3 per cent of my holdings in gold. Yet, on other occasions, closer to 10% (currently).

Yes, in a recent days, I’ve taken “a hit” (I am “diversified” so that although I’m losing in the gold “arena,” I’m holding my own in my overall brokerage account, i.e., tech stocks.

As I continue, let me share what I refer to as a metaphorical story, maybe better stated, an example of why I hold gold as what I deem: "an insurance policy."

About a ten-years ago, we here in Massachusetts had a severe ice storm. Telephone and electrical wires were torn from houses. In some cases, fallen trees knocked wires from poles.

In my case, my house experienced what I was told was a "brown-out." As the repairman later stated: “Electricity usually goes where you want it to, but sometimes, it doesn’t. In my case, it didn’t.

To make long tale of woe short. I needed a new furnace, garage door-opener, etc.

In addition, the storm blew out my computer, and several appliances, i.e. coffee-maker, not to mention anything and everything that was connected to an electrical outlet.

In the end my wife and I lost all the food in our refrigerator-freezer. In fact, we had to live with my daughter and son-in-law for a few days until the system was repaired.

Furthermore, when we returned to our house, the temperature was below 50 degrees.

Finally, I was told that it could have been much worse; there could have just as easily been a fire.

As soon as matters settled down, I called my insurance company. I told them what had happened. I was told to send them a detailed list of “damages."

As it turns out, I received a “healthy" check (an appraiser came), but it was, quite candidly, nowhere near the cost of repairing all the “blown” or damaged items, the furnace was the biggest "nut."

At this juncture, you might be asking what’s this all have to do with gold; it sounds like so many apples and oranges.

My point is that I compare that "outage" incident to why I have gold in my portfolio. I call it “just in case.”

Yes, just like my homeowners' insurance into which I pay the “premiums, in a sense, the same is true with gold. In a way, you're "buying" protection.

I believe that with gold I have some protection in case of a "black swan" event, i.e., something totally unexpected.

Furthermore, I don’t have to spell out all the possibilities in our “fragile” work. e.g., debt ceiling, banking crisis, inflation, possible recession, war in Ukraine. The list would go on and on. As my father might have said in times like these, "…a strong gust of wind.”

Yes, that’s why I own gold stocks. I call it my ”just-in-case," worst-case scenario, holding.

Looking back, did my wife and I expect a “brown-out?" No! But it happened. That's why, "Just in case," I own gold.