Why Are Some of the World’s Top Billionaires, Hedge Fund Managers and Nations Buying Gold Now?

2020 was one of the craziest years we’ve ever had.

On February 19, 2020 the S&P 500 reached its highest point ever, closing at 3,386. Global unemployment was at its lowest level in history and the U.S. was enjoying a decade of economic prosperity.

However, the next day it started to crash as Coronavirus fears swept the globe. Then in March, government officials began to shutdown businesses, restaurants and schools, causing widespread panic and uncertainty about the future.

This led to a market crash that included the three worst drops in U.S. history (March 9, 12 and 16) and caused the Dow and S&P to have their worst first quarter ever.

But then something even stranger happened…

Even as more bad news spread, the market started to climb again in April.

Unemployment rates were horrible, there was no vaccine in sight and states were still shut down — and yet the market seemed completely disconnected to reality.

And by the end of 2020 the stock market ended at record highs. The Dow gained 7.25%, S&P 500 grew over 16% and the Nasdaq was up a remarkable 43.6%.

Wall Street and The Fed breathed a sigh of relief as the masses returned to the stock market and started to invest again. Maybe the trillions of dollars the government printed was really working to “stimulate” the economy.

However, not everyone was buying this narrative.

For example, Warren Buffett once said, “Be fearful when others are greedy, and greedy when others are fearful.” And it appears he’s following his own advice.

Buffett spent most of 2020 selling stocks, including all his shares in airline stocks, Restaurant Brands International, Pfizer and Costco. He also sold over $1 billion worth of Apple stock and over $2 billion of Wells Fargo stock.

In total, he sold over $28 billion of stocks in 2020. He then did something even more alarming: he bought $560 million of gold, something he’s been skeptical of his entire career.

And it wasn’t just Buffett. Many other billionaires, hedge fund managers and even central banks (like The Fed) have been on a gold buying spree recently.

Billionaire Sam Zell, founder of Equity Group Investments, recently bought gold for the first time in his 51-year investing career too.

In an interview with Bloomberg he said: “For the first time in my life, I bought gold because it is a good hedge. Supply is shrinking and that is going to have a positive impact on the price.”

Ray Dalio, another billionaire investor and chief of Bridgewater Associates, says, “I believe that it would be both risk-reducing and return-enhancing to consider adding gold to one’s portfolio.” In fact, it’s one of his top three investment picks for 2021.

So why would these investors — very brilliant people who typically invest a lot of money in the stock market — think now is the time to buy gold?

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