Yesterday Mr. Powell, the Fed leader, reversed his previous stance on the need to continue raising interest rates for a long time. Stocks, bonds, foreign currencies and precious metals soared on the news.
Our client portfolios did quite well, since all those asset classes appear in various client accounts.
Today gold is still going up along with bonds, while stocks are catching their breath. The more dovish the Fed gets, the more attractive gold gets, I believe.
Since gold and silver are at multi-decade inflation-adjusted lows and stocks are just 10% or so off all-time highs, it makes sense to over weight the former and underweight the latter. However, in our standard allocation, we do not anticipate the future. We simply allocate funds among the asset classes based on how they are behaving recently.
No action needed for now.