DANVERS — There may or may not be gold in them thar hills, but if Robert Lutts has his way, it would be in your portfolio, along with some stocks.
Lutts, president of Cabot Money Management in Salem, made his recommendation about investing in gold as a hedge against inflation during a breakfast talk yesterday at the North Shore Business Expo.
"Inflation is starting to build, and in two or three years there is going to be a real problem," he said, adding that investors should start hedging now by moving into more aggressive and alternative investments, such as gold.
Lutts said gold is trading at about $1,700 an ounce. Last year at this time, it was $1,400 an ounce.
However, gold as an investment is hard to understand, he said, and he has yet to see large institutional investors "jump in, in a big way." Investors who don't want to buy physical gold, he said, can invest in it through exchange-traded funds.
Lutts, who characterizes himself as an "independent thinker," makes appearances on TV financial networks and has been quoted in leading newspapers, financial and otherwise. He has been keeping a close eye on the emerging markets in China, India, Brazil and elsewhere. One of the many slides he presented yesterday showed him in Mumbai, India, three weeks ago.
His point was that while India's Sensex stock index took a hit last year, it has had an annual return of 16 percent over the last 10 years.
Still, there is no shortage of things to worry about in the economy, from jobs, to a flat housing market, to the prospect of inflation, to the nation's $15 trillion debt, Lutts aid.
Still, he was upbeat about the U.S. economy, which he said is a global economy that drives jobs and economies around the world.