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As I keep emphasizing, a tectonic shift is taking place in the financial system.

For decades, the dominant theme for portfolio composition was 60/40, meaning investors should allocate 60% of their portfolio to stocks and 40% to bonds. This was literally the gold standard for asset allocation used by Wall Street, financial advisors, and even hedge funds (Ray Dalio’s famed Bridgewater hedge fund was based on this structure).

Not anymore.

For the first time in over half a century, major financial institutions are beginning to advocate allocating capital to precious metals. Mike Wilson the CIO at Morgan Stanley is now advocating for a 60/20/20 allocation: 60% stocks, 20% bonds, and 20% precious metals.

Wilson is not the only one. The Bond King Jeff Gundlach, who literally manages a bond fund, is advocating a 25/25/25/25 portfolio: 25% stocks, 25% bonds, 25% precious metals and 25% cash. Again, this is a man whose job is to manage bonds and he’s advocating for investors to own gold.

This is a tectonic shift.

For decades, precious metals were considered a relic that was un-investable by major financial institutions and investing legends. Warren Buffett famously declared that gold doesn’t do anything but “look at you.” And if you brought up owning gold to your financial advisor they would look at you as if you were a conspiracy theorist.

So, the fact that both major financial firms and investing legends are now advocating for allocating capital to gold signals a seismic change. For the first time in decades, gold is being seen as legitimate investment by the investing establishment. Which means BILLIONS of dollars in capital will start flowing into the sector.

Consider that the entire gold bullion market (the bullion that is bought and sold every year) is only ~$60 billion and the combined market capitalization of every gold mining stock traded in the U.S. is only $600 billion and you begin to see the potential upside here.

So, if you think the bull market in gold is over, you’re very mistaken. For the first time in decades major financial institutions are telling clients to buy gold. And given how small this market is, the bull market in gold could last much longer and go much higher than most investors think.

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