Paul Singer Says to Buy Gold, Sell Bonds

paul-singerInvesting legend Paul Singer, speaking at CNBC’s Delivering Alpha conference recently, urged investors to buy gold and sell bonds amid what he believes to be the “biggest bubble in the world.”

Singer noted that gold is “underrepresented in many portfolios as the only money and store of value that has stood the test of time.” The billionaire founder of Elliott Management, which boasts some $27 billion in assets under management, also said that gold looks “undervalued” at current levels around 1,316 per ounce.

As bullish as Singer is on gold, he’s equally bearish on bonds:

“I think owning medium to long-term G-7 fixed income is a really bad idea. By removing these things that are bad ideas, that’s a helpful thing. Sell your 30-year bonds.”

With the global bond market at $60 trillion, and nearly $10 trillion of that yielding negative rates, Singer sees a “tremendous, never-before seen asymmetry between potential further reward and risk.”

No one knows how the great unwinding of low-yielding government debt will unfold, but Singer clearly believes the best course of action is to buy the yellow metal and avoid any long-term government debt.

He’s not alone in liking gold right now. BlackRock recently noted that gold should have a place in all investors’ portfolios, and Macquarie sees gold as having a 75% chance for a massive rally in coming years.

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ETF investors who want gold exposure in their portfolios without having to own physical gold should look at the SPDR Gold Trust ETF (NYSE:GLD). The largest fund tied to the spot price of gold bullion rose $0.52 (+0.39%) to $134.19 in premarket trading Friday. Year-to-date, GLD has risen 10.86%, and has actually outperformed stocks on a long-term time frame, as well.

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