Last week, for the first time since 2016, all three stock market indexes fell. For five days in a row!
The S&P 500, Dow Jones, and Nasdaq indexes were all in the red.
Luckily, Monday saw some recovery this week. The tail end of this bull market has been mercifully resilient so far.
If you’ve been watching the markets closely, no doubt you breathed a sigh of relief.
But it doesn’t take a multi-year downturn to make stock investing feel painful if you aren’t properly diversified. There’s no better time to consider your allocations to alternative “safe haven” assets.
Negative market events always arrive unexpectedly, but there’s one thing you can predict with certainty: they will come!
Let last week’s temporary market pain be a good reminder… take the steps you need NOW. Be sure you are ready for the day when the markets don’t recover so easily.
MORGAN STANLEY WARNS:
DON’T FALL UNDER FAIRY TALE SPELL
Investment research powerhouse Morgan Stanley says retirement investors are buying into a false “Goldilocks” narrative… at their peril.
Morgan’s research says they are under a spell of conventional market wisdom that no longer holds true.
Do any of these tropes sound familiar?
- “The economy is not too hot and it’s not too cold”
- “Tighter spreads are ahead for credit”
- “New highs are ahead for stocks”
Michael Wilson, Morgan Stanley’s top U.S. equities strategist, says these ideas are now just dangerous fantasies best left at the wishing well.
“What if growth isn’t ‘just right’ and Goldilocks is the wrong fairy tale?” he wrote in a note to clients. “I see other reasons for the growth slowdown that have been under appreciated by most market analysts.”
Here’s the list of top issues he is worried about:
- The market’s one-time boost from corporate buybacks (a result of tax cuts) and repatriation of overseas cash is now over
- Labor costs are rising fast
- Logistics are getting much more complicated for companies
- The market’s resilience in the face of deteriorating underlying conditions is a sign that investors are overenthusiastic
“Rather than Goldilocks,” Wilson says, “perhaps we should be talking about Hansel and Gretel — a fairy tale about the dangers of an unwholesome appetite as a means of survival — i.e., chasing prices higher and justifying it with the wrong narrative.”
What narrative are you following in your mind, and how might this affect your family’s future?
If you’ve diversified and prepared, you’ve built your future out of bricks and are ahead of the game. If not, your cottage might be made of paper and an easy target for wolves.
We like to remind our readers that we don’t recommend market timing.
In fact, we recommend the opposite… get prepared for all seasons!
WHAT’S AHEAD FOR GOLD? 3 EXPERTS WEIGH IN
Alain Corbani, head of commodities at Finance SA, says monetary policy could be a key trigger for higher gold prices ahead.
“The bottom line is real rates will stay where they are. We are going to have a little more inflation … and twin deficits, high debt-to-GDP. I’ll remind you [that these] are the basic ingredients for gold to perform. [It also] means lower U.S. currency and a higher gold price,” Corbani says.
Corbani says the environment for gold is “much brighter” today than even three years ago, when he believes the current gold bull cycle started.
Lobo Tiggre, principal analyst for The Independent Speculator, says all the ingredients for a price breakout for both gold and silver.
All the essential components are there, the analyst believes. “2019 could be the year we finally break out of this range that we’ve been in … in gold terms, between $1,200-$1,400. We have both the fear trade and greed trade potential playing into precious metals,” he said.
Tiggre is also “uber-bullish” on silver: “Silver bugs rejoice, I am very bullish on silver this year because I am bullish on gold. And where gold goes, silver follows. When the precious metals break out, gold leads and then silver goes off,” he said.
Investors must also keep in mind that silver is more volatile than gold, Tiggre added. “And if gold is going to go up, silver will go up more. I’m uber-bullish on silver.”
George Milling-Stanley, head of gold investment at State Street Global Advisors, says that investors shouldn’t ignore signs of underlying strength in gold.
Milling-Stanley said that he continues to look for gold to trade above $1,350/oz in 2019. He believe investors will favor alternative defensive assets as a hedge against weaker global currencies.
He added that the U.S. dollar should not pose problems for the yellow metal going forward. Also, Milling-Stanley said that it will be difficult for stocks to hit new highs with weaker global growth and rising volatility ahead.
Milling-Stanley said that governments and central banks around the world are now in a “race to the bottom,” in an attempt to backstop their economies.
“This is an environment that can only be good for gold,” he said.
WHAT IS BEST FOR YOU AND YOUR FAMILY?
It is true… it can take a little time and research to learn what is right for you. It has to be right for now and for the future.
Why not take the first step today? Please don’t wait until it is too late to act.
Gold and silver will very likely continue to hold great value for generations to come, just as they have for thousands of years. Can you say that about any other asset you can think of?
That’s the kind of safe haven asset a retirement plan might need when the going gets tough.
Have you done your research?
Let us help you make your move today with a Gold bullion IRA!