Unlimited CEO Bob Elliott: You Don't Need A Lot Of Gold For An Efficient Hedge

Bob Elliott is co-founder, CEO and chief investment officer at Unlimited, a fintech company specializing in building products that replicate the index returns of alternative investments.

Before founding Unlimited, Elliott was a chief business officer of the healthcare company Roviant Sciences.

Elliott spent most of his career at Bridgewater Associates, rising from an investment associate to a member of the investment committee. He also held the position of the head of foreign exchange, as well as the head of Ray Dalio’s investment team.

One of his noteworthy contributions at Bridgewater was as the author of hundreds of the widely read “Daily Observations,” demonstrating his ability to distill complex financial concepts into insightful commentary.

Like his former mentor Dalio, Elliott is a meticulous student of history, often drawing parallels with the past. Unsurprisingly, he holds a bachelor’s degree in History and Science from Harvard University.

Elliott will join other financial industry veterans at Benzinga’s Fintech Deal Day event in New York City on Nov. 13. He will speak on the topic of “Navigating Volatile Markets: Strategies for Uncertain Times” alongside fellow Bridgewater alumnus Andy Constan.

Elliott is a tireless market researcher, almost perpetually sharing his opinions through various media outlets and his X (formerly Twitter) and YouTube accounts.

Lessons From the Past 

In a recent discussion, Elliott shared his insights on the economic dynamics during wartime.

"Wars by their nature are inflationary as Goods requiring raw materials are produced and then destroyed without an increase in productive capacity," he noted.

He emphasized governments often keep interest rates artificially low to finance war efforts. This is done to “socialize” the cost of war financing across the entire economy through inflation. As a result, holding cash during a wartime environment becomes a less attractive option. Cash tends to have a lower yield than in peacetime, and inflation erodes its purchasing power significantly.

He cited examples, including those from World War II, to illustrate these economic dynamics. While acknowledging that today’s conflicts may not precisely replicate past conflicts, understanding the fundamental principles behind such events can be valuable in assessing their potential economic consequences. 

Also Read: Why Bond Market Veteran Andy Constan Believes In ‘Higherer For Longerer’

Elliott also reflected on gold, which rallied significantly, propelled by escalating armed conflicts.

"Commodities do very well because you’re digging them out of the ground and destroying it. Gold does well in that environment as well because it’s essentially the only money that’s not being debased by governments in order to pursue the war effort."

He suggested that even a small allocation of gold in a diversified portfolio can serve as an effective hedge.

"Global conflicts are not yet nearly as substantial as those previous global conflicts, but we’re still getting a significant bit in gold because it has that convexity, so I think that’s why gold is a great asset to hold as a small position in a diversified portfolio," Elliott said, clarifying he always thought about gold relative to bonds because it doesn't pay a yield.

What better place than Benzinga's Fintech Deal Day & Awards event to learn more about the latest trends in finance? Join Benzinga's two-day event this November to stay updated on hot topics like the current macro environment, AI, regulations and Web 3.0. Secure early bird discounted tickets now!

Photo: Elliott, Unlimited; gold, Unsplash

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