The equity bull market that began in 2008 has been dubbed the most hated bull market in history by some. The run higher in equities over the last several years did, indeed, leave many scratching their heads. While many equity investors have enjoyed some strong returns during this period, there are ominous signs pointing to the possible end of the party.
Consider current interest rates and bond yields.
Since getting off to a terrible start to 2016, stocks have come roaring back in the last several months and find themselves within striking distance of previous all time highs.
Treasury yields, however, have remained not far from multi-year lows reached in early February. The 10-year note is currently yielding about 1.70 percent and has been unable to rise back above the 2 percent yield mark since the first of the year.
Who is right? Equity investors or bond investors?
Given the choice, we would have to go with bond investors.
Given the low-interest rate environment the globe still finds itself in, you might feel this could be bullish for stocks. After all, if borrowing costs are super cheap, companies should be able to grow and expand and thus boost valuations in the process.
It may be these very low yields, however, that act as an additional suppressant to further upside potential in stocks.
Yields that remain suppressed may say something about the potential for economic activity. If that is, in fact, the case, the future doesn’t look so bright.
Cyclical stocks that tend to rise and fall with the peaks and troughs of economic activity may have some tough times ahead, and investors may look to reallocate into more defensive positions or alternative asset classes such as gold or silver.
Stocks have seen some volatility in recent trade after failing to challenge previous all-time highs, and an uptick in volatility could potentially send yields even lower. The current divergence between stocks and yields is not likely to continue much longer whichever way you slice it.
Stocks may also simply lack any significant bullish catalyst currently, as the magic over low rates and QE appears to have largely worn off.
With concerns over China and other emerging markets, negative interest rates, dubious job growth and numerous other issues, it’s hard to imagine the bull market having much left in the tank.
Perhaps it’s time to get ahead of the curve…
The rise in equities is not likely to go on indefinitely, and now may be a good opportunity to book some profits and consider some alternatives.
It may be a good time to consider an allocation in key precious metals such as gold and silver.
These precious metals have been considered a reliable store of wealth and value for thousands of years and have stood the test of time through many bull and bear markets.
These metals are on the rise currently and may be headed back to previous all time highs or even well beyond those highs.
They may potentially offer protection from declining currency values, geopolitical risks, and even deflation.
Considering the fact that these are all issues that are currently affecting global markets, wouldn’t it make sense to begin building an allocation in gold and silver sooner rather than later?
With stocks potentially on the edge of a cliff, what better time than right now?
Discover how physical gold and silver may fit into your portfolio and potentially hedge against many of the risks faced by modern investors. Now may be the calm before the storm, don’t wait for the winds to pick up and lightning to strike.
Speak with an Advantage Gold account executive about the potential benefits of physical gold and silver ownership. Our professionals will answer any questions you may have and can even show you how to use your IRA account to begin building an allocation in these hard assets. Don’t wait for a stock market collapse before taking action. Call us today at 1-800-341-8584 and explore your options today.Tags: add gold to my ira, advantage gold, allocation in precious metals, alternative asset classes, build an allocation in gold, bull market ending, buy gold, buy silver, precious metals, protect you assets