The stock market got off to a rocky start in 2016, but it recovered, and it is performing at the expected level, according to some investors. But there are other investors that believe the U.S. stock market is going to tank by the end of 2016. Several hedge fund managers are not happy with the performance of the assets they manage this year, and they are turning to the precious metal market for help. George Soros is one of those hedge fund investors. Soros recently bought more than 19 million shares of Barrick Gold, according to a post by CNBC.com. CNBC mentioned the article that the Wall Street Journal published about Soros and his bearish investments in gold.
The Soros Management Fund is a $30 billion family fund that Soros set a few years ago when he bought his limited partners out. Before the fund became a family fund, the investors in the Soros fund made an enormous amount of money. Back in 1992, the Soros fund made more than $7 billion when George predicted that the UK would have to devalue the pound. For the last 24 years, Soros has added billions more to his personal fortune which is now estimated at $24 billion.
George Soros | The New York Review of Books
According to the WSJ, Mr. Soros hasn’t been active in the market recently. He spends more time concentrating on his Open Society Institute. The Open Society Institute has locations in more than 20 countries that are experiencing government demoralization. But George Soros returned to trading recently because he believes the gold market is the place to make money in 2016. Soros thinks the recession that has turned countries in Europe, South America, and Asia into shadows of their former economic self is going to impact the United States in 2016. When countries go into recession mode, the gold market comes alive. Some investors think gold will hit $1400 an ounce in 2016, and by the end of 2017, it could be worth more than $2,000 an ounce.
China is also buying gold and so is Russia, and just about every big-time hedge fund manager in the world. The Chinese economic situation, the potential collapse of the European Union, terrorist’s attacks, and the ongoing migration issue are turning major investors away from stock markets, and they are finding other assets that are not affected by economic downturns. Gold happens to be their number one choice because, as strange as it sounds, gold is a bargain right now.
George Soros is not walking away from the stock market, but he is diversifying his position and other investors are doing the same thing. But Soros still believes that cash is still king when economies start to contract.
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