Investors’ Risk Appetite Is at an All-Time High. That Could Be a Problem.

Risky Business

A lot of this money has flowed into stocks and other risk assets. According to Morningstar, mutual funds and ETFs saw net inflows of $722 billion in the first six months of the year, the largest semiannual amount going back to 1993. As of the end of 2020, a record $5.4 trillion sat in funds that passively track the S&P 500, Axios reports.

Another Taper Tantrum?

Obviously there’s nothing inherently wrong about anything I’ve said up to this point. There’s no reward without taking on some risk. I’m thrilled that more Americans are participating in the stock market, which has done very well since cratering in March 2020. Many young Robinhooders have made some incredibly profitable investments in recent months, including airline stocks.

Remember the 10% Golden Rule

As you’ve heard me say many times, I recommend a 10% weighting in gold, with half of that in physical gold (bars, coins and jewelry) and the other half in high-quality gold stocks, mutual funds and ETFs. I also think it could be prudent to have between 1% and 2% in Bitcoin and Ether, including crypto mining stocks. Remember to rebalance regularly, at least once a year, but you could see additional benefits by rebalancing every quarter.

Speaking of Gold and Bitcoin…

On Wednesday, August 18, I will be participating in a webcast on gold and Bitcoin, and I will be joined by none other than Bitcoin evangelist Michael Saylor, founder and CEO of MicroStrategy. This is one webcast you do not want to miss! To get the link to book your spot for this exclusive conservation, email me at with subject line “Michael Saylor webcast.” Enthusiasm has already been very high.



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Frank Holmes

Frank Holmes

Frank Holmes is the CEO and chief investment officer of U.S. Global Investors, an innovative investment manager with vast experience in global markets.