Sculpted from experience, built for success. 
 
How Billionaires are Preparing for the Next Bear Market. 
 
No one likes to lose money, even if you have billions to spare. It’s why the prospect of a bear market – a prolonged downturn which sees stock prices fall by at least 20% over two months or more – is something that keeps even the world’s most elite investors awake at night. 
 
To hedge against this concern, the world’s billionaires use a variety of strategies and tactics to protect their wealth, including setting up their portfolios with specific asset allocations that can help soften any blow caused by an extended market downturn. 
Protecting Wealth 
Today’s animation comes to us from Sprott Physical Bullion Trusts and it highlights a strategy being used by billionaires ranging from Ray Dalio to John Tudor Jones II. 
 
Because market sentiment can change so quickly in the market, these elite investors protect themselves by having diverse portfolios that 
include uncorrelated assets. 
 
While this sounds complicated, uncorrelated assets are simply investments that don’t move up or down in the same direction as the other asset 
classes in the portfolio. A small allocation to these uncorrelated items can help protect the value of a portfolio when market sentiment changes. 
The King of Uncorrelated Assets 
What kind of asset classes can be used for this kind of purpose? 
 
While options like real estate, commodities, and cash can contribute to a more diversified portfolio beyond traditional stocks and bonds, many experts say that gold is the undisputed king of uncorrelated assets. 
 
The price of gold doesn’t usually doesn’t move with the wider stock market – and often, because of its history, the yellow metal can even increase in price during the course of a bear market. 
 
Here are some of the reasons billionaires turn towards an allocation in gold: 
Gold has acted as a store of value for thousands of years 
 
Gold can lower the volatility of a portfolio 
Gold can act as a hedge against inflation in some scenarios 
Gold is a traditional safe haven asset that investors flock to when the market goes astray 
 
Billionaire Actions 
To kick off 2019, a new billionaire jumped onto the gold bandwagon – along with previous advocates such as Ray Dalio, David Einhorn, John 
Paulson, and John Tudor Jones II. 
 
The newest entry to the club is Sam Zell, the pioneer behind real estate investment trusts (REITs). He bought gold for the first time in January, citing that it is “a good hedge” and that “supply is shrinking” as new mine discoveries dries up. 
 
With market volatility back in the fray, it’ll be interesting to see how many more of the world’s elite investors also jump on the bandwagon. 
Source: Visual Cap. 
 
Delivering opportunity and connecting with customers since 2009. 
Building a brighter future, investing together. 
 
Thank you for reading and subscribing. 
 
Keep up to date with all of our news and video releases by subscribing or clicking on the links below: 
 
 
For the avoidance of any doubt, nothing on this website is intended to constitute advice to you and the content is displayed for illustrative and 
information purposes only. 
 
Making more possible. 
Today. Tomorrow. Together. 
 
Oakmount and Partners Ltd. Est 2009. 
Sculpted from experience, built for success. 
Share this post:
Our site uses cookies. For more information, see our cookie policy. Accept cookies and close
Reject cookies Manage settings