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The investing world has been impacted for years by the contributions of George Soros. Recently the billionaire investor made headlines when he came back into the investing world after a bit of a hiatus. The Wall Street Journal reported that Soros recently made a collection of huge investments. His million dollar, company Soros Fund Management, purchased shares in gold miners during what was thought to be somewhat difficult economic times.
Soros sees the current economic times as an opportunity. He is drawn to the opportunities to profit from what he currently sees. His recent big investments are a bit unusual for him, compared to his normal way of doing investing. Soros has been known in the past for being very independent and closely monitoring his firm’s investments. His process has even brought some criticism from some of his colleagues in the past. Some senior executive didn’t care for the way George Soros pushed himself into the firm’s operations. Recently however, that has changed. Soros is taking a more hands on approach with his investing spending more time in the office directing trades. His recent style change is sure to make his company Soros Fund Management even more successful.
George Soros certainly has the experience to justify making major moves like this. A graduate from the London School of Economics, Soros began his career in investing by holding management positions at the New York firms of F.M. Mayer and Arnhold & S. Bleichroeder. His work and experience there would lead him to began his own hedge fund company Soros Fund Management. He managed this company for years and achieved great success. Now, late in his career and one of the wealthiest people in the world, Soros has focused many of his efforts on philanthropy, giving large donations worldwide through another one of his companies, Open Society Foundation. Soros continues to show passion for his work, even in this late stage of his career.
Learn more about George Soros:
Currently, many government bonds pay interest slightly above zero. After accounting for inflation, quite many fixed-income investors end up with real negative rates. As Bloomberg portrays, over $8 trillion of government-issued bonds pay investors negative rates.
Basically, investors are paying the bond-issuers to hold their money. When it comes to Swiss bonds, even the nominal rates are below zero! In that case, why lose money by borrowing, while taking risks?
Many investors don’t see much sense in allocating large portions of their portfolios to fixed-income products. At the same time, stocks are no longer attractively priced. So, investors are moving into precious metals, specifically gold.
There are many ways to invest in gold. Gold bullion can be acquired directly in the form of coins (such as American Gold Eagles) or gold bars. Another way is to buy gold Exchange-Traded Funds (ETFs), or even acquire shares of gold mining companies.
This year alone, investors allocated more than $8 billion into SPDR Gold Shares. And more money is flowing into other gold funds. George Soros, the famous investment guru, has just bought nearly 80 million shares of Barrick Gold, the largest gold producer in the world.
At present, gold trades around $1,200 an ounce. It is not as cheap as it was at the beginning of this century, but it’s nearly 40% off its high in 2011. Gold, however, fluctuates in the short-term, so it may not be something to investors with short time horizons. For the longer time, it’s a different story.