This Week’s Blog Is Written By Scott D. Heins, CFP®, IAG Chief Investment Officer
February 4, 2026

Oz

Most people cannot read the title of today’s blog without thinking of a wizard. Perhaps that is because, because, because of the wonderful things he does.

The land of Oz is an interesting place. Its highly respected leader, Oscar Zoroaster, is a common man whose wayward hot air balloon resulted in his surprising rise to power. However, the story’s political meaning was much more contentious when it was written in 1900.

Oz is more than Oscar’s initials. Oz also happens to be an abbreviation for ounces. And L. Frank Baum’s story advocates for using silver (slippers) instead of gold (yellow brick road) to back the U.S. dollar.

We know how this story ends. Today we use neither gold nor silver to back our currency. It is simply backed by you, the taxpayers and our collective economic strength.

However, gold and silver have not lost their allure. They have both captured traders’ attention over the last year or so as more federal banks have accelerated their precious metal purchases.

While they are often fondly touted as long-term protectors of purchasing power, both gold and silver have bouts of volatility that rival or even exceed that of the stock market on a regular basis.

This year is a perfect example of how past performance does not predict future results.  Both gold and silver had very strong returns in 2025, propelling more buying in early 2026 and pushing prices up rapidly. By the time last Thursday rolled around, the price of gold was up over 25% since December 31. Wow!

And then gold prices plummeted by 14% the next two trading days. No one knows where it will go from here, but not everything that has extraordinary recent past performance and a cultural reputation for safety is actually a safe short-term investment.

The good news is that we tactically added an allocation to commodities and natural resource companies to our client portfolios in the fall of 2023, and our clients have benefited from this diversified mix of metals and other raw materials. The bad news is that with 20/20 hindsight we should have allocated 100% of our clients portfolios to precious metals at the end of 2024.

Part of successful long-term risk-aware wealth building is avoiding the siren of short-term outsized past performance as an indicator of ongoing future results. Sometimes momentum may carry higher prices into the future for a bit, but short-term traders’ attention spans are notoriously unpredictable. Tying your future success to their fickle whims is at best inadvisable.

Instead, we humbly suggest that taking the long-term approach of a diversified portfolio may be a better path to building long-term wealth. It is true that diversification ensures that no single investment will make you wealthy overnight. More importantly, the opposite is also true.

So, grab some popcorn, find the Wizard of Oz on one of your 17 streaming services, and celebrate that you own a small part of the yellow brick road and some silver slippers as part of your diversified portfolio. You may also wish to celebrate that you do not own any flying monkeys.

Quote of the week: Robert Arnott: “It’s a natural human tendency to forecast the future by extrapolating the recent past. This is the reason people chase performance, which is, in turn, the root source of the most grievous errors in investing.”

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through IAG Wealth Partners, LLC, (IAG) a registered investment advisor and separate entity from LPL Financial.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.

Any opinions are those of IAG and not necessarily those of LPL Financial. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. No strategy assures success or protects against loss. Investing involves risk including loss of principal.

ART: 1059625
Photo Credit: Chat GPT