Egyptian billionaire Naguib Sawiris advises to invest a quarter of a portfolio in gold

Egyptian billionaire and long-time gold investor Naguib Sawiris told CNBC on Tuesday that he recommends gold should make up 20 percent to 30 percent of an investors’ portfolio.

Gold is a good investment at a time when the world is concerned about inflation, Sawiris noted.

The precious metal is often touted as a hedge against rising prices and a safe-haven asset that should make up around 5 percent to 10 percent of an investor’s portfolio.

“I say 20% to 30%. I used to be at 50%,” the chairman and CEO of Orascom Investment Holding told CNBC’s “Capital Connection”.

“It’s something that’s fundamental. It’s always been there.” Sawiris said.

The Egyptian business tycoon has even established a $1.4 billion gold mining fund that was launched last month, describing this move as “personally motivated” because a substantial part of his net worth is in gold.

Gold can act as a buffer to risks in the market, he suggested.

“Let’s say the inflation comes in and there is a crash in the stock market for any reason or the other, you know, then you will be very happy that … you have a position in gold,” Sawiris said.

Asked if he expects the stock market to fall, Sawiris said prices have been high for a “very long while” and will “inevitably” decline at some point.

There are also many uncertainties such as political instabilities and the “never-ending saga” of the COVID-19 pandemic, he added.

“I want to go sleep at night not affected by a crash on the stock market or a pandemic,”

Gold is not immune to all market events. However, historically, the precious metal has a mixed record on returns during inflationary periods.

It also incurred a 4 percent sell-off following a better-than-expected U.S. jobs report on Friday, before a “flash crash” was driven by a lack of liquidity this week.

Sawiris also acknowledged that higher interest rates, which could come as economies recover from the pandemic crisis, will “eat up” gains from gold. Still, he said he is a long-term investor in the metal.

https://www.cnbc.com/video/2021/08/10/egyptian-billionaire-says-to-invest-up-to-30percent-of-a-portfolio-in-gold.html