Egyptian billionaire Naguib Sawiris told CNBC that gold is a good investment at a time when the world is concerned about inflation, according to "Al Arabiya.net." The precious metal is often promoted as a hedge against rising prices and a safe asset that should constitute about 5% to 10% of an investor's portfolio. However, Sawiris, who has long invested in gold, recommends allocating a larger portion of the investment portfolio to gold.
The Chairman and CEO of Orascom Investment Holding said, "20% to 30% might be better," and he even created a gold mining fund worth $1.4 billion, which was launched last month. He also mentioned that this move was "personally motivated" since a large part of his net worth comes from gold.
**Gold as a Hedge**
Sawiris pointed out that gold can serve as a risk buffer in the market. He stated, "Let’s assume inflation is coming and there’s a stock market crash for one reason or another; you would be very happy to have a buying position in gold." When asked if he anticipates a decline in the stock market, he remarked that prices have been high "for far too long" and will inevitably decrease at some point.
Additionally, there are many uncertainties such as political instability and the ongoing saga of the COVID-19 pandemic. He added, "I want to sleep at night without being affected by a stock market crash or the outbreak of a new pandemic." Sawiris acknowledged that high interest rates, which may accompany the recovery of economies from the COVID-19 crisis, will "eat away" gold gains. Nevertheless, he stated that he is a long-term investor in the metal.
