Consider for a second… there are very few under the age of 30 or 35 that have any memory or understanding at all of what a serious stock market event is like.
For them, the Dow Jones tree does seem to grow to the sky.
But market events do strike, sooner or later. It is simply inevitable. Sometimes as much as twice in a decade or more. Just consider:
2000-2002: S&P 500 fell 49% over 30 months
2007-2009: S&P 500 fell 56% in just 17 months
“Newbie” investors are far less likely to know what to do when headlines look ugly, except to sell in fear or try to time their way in and out. That means more volatility for everyone.
If you’ve saved for a lifetime to be able to retire in relative comfort and security, it is time to think seriously about what a market crash could mean for you.
A sudden drop of 50% could mean extending your work career years beyond what you had counted on. Or cutting your lifestyle in half to compensate. It could devastate your legacy to kids and grandkids, or to charitable institutions.
That’s why gold’s safe haven status and role as a portfolio diversifier / volatility-reducer is so well documented.
If you’ve grown complacent about your portfolio, saying “I’ll take care of it tomorrow,” you owe it to yourself to at least get more information about safe haven assets. Your retirement kitty has to last for 20 years or more, on average!
We’re knocking on wood here, of course. Hopefully we’ll see higher markets in a year – but who knows? Even Warren Buffett says “I never have an opinion about the market,” he has said, “because it wouldn’t be any good.”
Rather than fretting about trying to time the market, we suggest considering safe haven assets like gold and silver. They are physical assets, secure and private, which can provide market diversification against traditional stock markets.
IS THE STOCK MARKET “TOPPING OUT”?
A rapid rise in bond yields is sounding an alarm signal for many Wall Street analysts and driving increased volatility for stocks.
“The S&P 500 is topping out as [U.S. Federal Reserve] policy normalizes,” says Barry Bannister, head of institutional equity strategy at Stifel. He thinks they may have already raised rates beyond what is prudent. This could lead to lower corporate profits and a quick market drop.
“We’re looking at a lot of volatility in the short term and I believe we’re entering a defensive market,” says Peter Cardillo, Spartan Capital Securities’ chief market economist.
As recently as Friday, nine out of 11 primary S&P 500 sectors headed down, with utilities and real estate the only gainers.
Morgan Stanley has been warning of a near term market correction for a few months now as well. “The causes of the slowdown are obvious — tough comparisons, Fed tightening, cost pressures mounting, and the risk of trade tensions turning more consequential,” they say.
CENTRAL BANKS INCREASING GOLD BUYING
DOLLAR COLLAPSE = HIGHER GOLD
According to Tocqueville Asset Management chairman John Hathaway, “a general loss of confidence in the U.S. currency is a credible risk.”
“Out of control” U.S. debt & deficit
Hathaway points out that the August 2018 budget deficit was the 5th largest on record! The Congressional Budget Office has projected the federal debt level to rise above 100% of gross domestic product by 2028. Hathaway describes this plainly… as “out of control.”
Hathaway believes it is very unlikely that the U.S. can outgrow this kind of debt expansion – not even close. He gives it a “good chance” that recession will hit by 2023 or earlier. Hathaway says the main driver for the next gold rally will likely be the “soon-to-be-obvious deterioration of U.S. sovereign credit.”
Famed investor Ray Dalio, head of Bridgewater Associates, agrees that the dollar looks weak ahead. He says the next two years will likely bring a “30% depreciation in the dollar.”
IS GOLD AT A CRITICAL INFLECTION POINT?
Mike McGlone, commodity strategist at Bloomberg Intelligence, says “gold appears to be near an inflection point… with the foundation solidifying for an extended rally.”
McGlone believes that precious metals could soon be on the rise as traditional markets fall.
He says gold’s “upside potential far outweighs possible risks” and recent volatility readings are “extremely low.”
Other top investment houses agree:
Commerzbank says gold prices will exceed $1,300/oz again in 2018
Goldman Sachs says gold will be over $1,325 in the next year
RBC Capital Markets says gold will be over $1,338 in 2019
Are you curious about why?
Why not call us today and get a quick 15-minute update on gold and silver? We are here to support you with complete product guidance and detailed answers to all your questions