(Mike Maharrey, Money Metals News Service) Are you smarter than a 10-year-old? Would you take investment advice from a 10-year-old Chinese girl?
One little girl in China sets the intelligence bar pretty high. In fact, people are calling her a “genius” based on her investment savvy.
Three years ago, she started buying gold with her Lunar New Year lucky money.
On the Lunar New Year (Feb. 17), Chinese adults traditionally gift children with red envelopes containing “lucky” money known as lai see in Cantonese or hong bao in Mandarin.
Her mother, Bai, said the young lady receives about ¥4,000 each year. That’s about $580 at the current exchange rate. Bai said the little girl started investing her lucky money in gold, worried that her parents might spend it. Revealing wisdom beyond her years, the girl expressed a belief that gold is easier to preserve than cash.
She’s right!
One of the reasons to hold gold is its role as a safe haven and as a secure way to store your wealth.
You’ve got to be impressed with this young lady’s perceptiveness. Of course, it’s unlikely that the little girl understands the government is more of a threat to her lucky money than her parents, as the Chinese government is as fond of monetary manipulation and currency devaluation as its counterparts in the West. As fiat currency loses purchasing power, the price of gold rises.
She learned this lesson in economics through experience. When she first bought gold, it was around ¥460 per gram. By February, the price had surged to ¥1,100. That’s a 139 percent return on her investment.
Most professional financial planners would kill for that kind of return!
Bai said her daughter has accumulated around 30 grams of gold. She hasn’t sold any, even when prices plunged during the correction in late January. In fact, Mom said she plans to buy more.
She’s not alone.
As the South China Morning Post describes it, rich and poor alike have caught gold fever in China.
“From migrant workers splashing out on gold-coated jewelry, to white-collar workers pouring their savings into gold-linked investment funds, the metal is widely seen not only as a marker of social respectability, but also as a safety net amid an uncertain world.”
The young lady’s investment success has made her something of a social media celebrity, garnering nicknames including “genius,” “the blessed investor,” and “the girl who travels back in time.”
“I can already see a future successful businesswoman in this girl,” the only commenter quipped.
“So smart of her to buy gold with the money. We all remember our parents using up our lucky money when we were young,” said another.
Meanwhile, Bai told the South China Morning Post she wishes she had followed her daughter’s investment strategy.
Of course, it’s not too late. One thing is certain: fiat currency will continue to lose purchasing power. Gold will continue to reflect this monetary devaluation with a rising price. If you want to protect your wealth, follow the lead of this perceptive 10-year-old Chinese girl.
Mike Maharrey is a journalist and market analyst for Money Metals with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.
