Weighing The Risks

George Milling Stanley of SSGA - Gold: New All Time Highs and the Implications for the Global Economy

Episode Summary

This week, Rusty Vanneman and Nick Codola talk with George Milling Stanley, Chief Gold Strategist at State Street Global Advisors. George is a Vice President and Chief Gold Strategist at State Street Global Advisors’ SPDR ETFs business. Prior to joining State Street, George was a Managing Director at the World Gold Council, where he was a key member of the team responsible for working with State Street Global Advisors to pioneer and launch the world’s first gold-backed ETF. He was integral in crafting the structures and processes required to make gold-backed ETFs functional. Before joining the WGC, George worked at Lehman Brothers where he developed customer business for the precious metals trading desk while being responsible for the firm’s research and analysis of the metals markets. Prior to joining Lehman Brothers, George’s career included five years as Chief Precious Metals Analyst at Consolidated Gold Fields, and 10 years as a reporter and columnist with the Financial Times.

Episode Notes

This week on Weighing the Risks we will take a closer look at gold. Why is it hitting all time highs and what are the broader implications for the Global Economy? What are the merits of various vehicles for getting access to gold and in what cases might George recommend using one vehicle over another? Learn more at orion.com.

Key Takeaways

• [03:47] - George’s professional background and what he focuses on, specifically, in his role at State Street Global Advisors.
• [07:16] - Since Nixon took us off the Gold Standard, gold has generally exhibited low correlations with stocks and bonds. Has George noticed this changing at all in this recent 0 rate policy cycle, as well as the subsequent rise in rates we’ve seen over the last year and a half or so?
• [09:04] - Why is gold hitting all time highs right now when it typically struggles in similar market environments?
• [13:14] - Why have central banks’ interest in gold risen a lot in a post-Covid environment while retail investors’ interest has stayed fairly level?
• [18:06] - Words of wisdom, or rules of thumb, for sizing an allocation of gold in a portfolio.
• [20:28] - What are the merits of various vehicles for getting access to gold? In what cases might George recommend using one vehicle over another?
• [25:41] - Nick presents a base case market scenario for gold in the coming year. Learn how George might adjust this outlook, if at all.
• [28:50] - Nick presents a good case market scenario for gold in the coming year. Learn how George might adjust his outlook, if at all.
• [32:45] - Nick presents a bear case market scenario for gold in the coming year. Learn how George might adjust his outlook, if at all.
• [35:19] - What are some risks we haven’t yet covered that investors should be thinking about?

 Quotes

[10:40] ~ “I, personally, and I think some other people with…nervousness [about] the risk on enthusiasm of the markets, have been looking to go a bit more risk off than I have been previously. I think that is why [gold has] been hitting record highs.” ~ George Milling-Stanley

[18:09] ~ “[When allocating gold] the literature basically says that any portfolio: institutional, or an individual, or hedge fund, or central bank…could benefit from…a long term, strategic allocation to gold of somewhere between 2% and 10%. The literature also says, that if you are experiencing or [are] anticipating a period of exceptional turbulence in financial markets, in general, it can make sense to double your allocation to gold.” ~ George Milling-Stanley

Links

• George Milling-Stanley on LinkedIn
• State Street Global Advisors
• “Come Rain Or Come Shine” by Tony Bennett
• SSGA SPDR

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