Much has been made of the slowdown currently being experienced by China. This makes perfect sense, after all, since China is the world’s second largest economy.
Stock markets have whipsawed along with Chinese equities, and any increases in volatility seen in China tend to spread quickly.
The People’s Bank of China has taken measures to boost its economy and stabilize its equity markets. From interest rate cuts to bans on short selling, the central bank has not been afraid to take the steps it feels are necessary to foster growth and provide confidence in its markets.
The question is: Will these measures be enough?
Signs are pointing to further weakness in China, weakness that could potentially drive equity market volatility and send stocks on the path lower once again.
In recent data, China’s industrial production and investment data were below market expectations. Industrial output rise is at a 6 percent rate while consensus estimates were looking for a rise of 6.6 percent.
Retail sales grew by 10.1 percent, also failing to match expectations and declining from the previous month’s year-over-year reading of 10.5 percent.
While some real estate indicators showed growth, some areas of the Chinese property market may now in fact be overheated.
Some would make the argument that China is one giant bubble just waiting to burst.
While the central bank may continue to see how things play out before acting further, the world’s second largest economy continues to show signs of slowing. In the first quarter of the year, the Chinese economy grew by 6.7 percent, the slowest pace in seven years.
With further signs of slowing, volatility could very easily pick up again, and markets could return to the scared, defensive posture seen on other occasions this year during periods of heightened selling in Chinese markets.
China and emerging markets will likely be watched closely by investors in the coming months.
As is often the case, it could get worse before it gets better…
Is your portfolio prepared?
If investors begin to dump stocks and risk assets en masse, where do you think this money will end up?
In our view, a significant amount of investor capital could find its way into gold, silver, and other precious metals.
These precious metals have a long history known as a reliable protector of wealth and value, and are often referred to as safe haven assets.
While gold and silver have gotten off to a very strong start in 2016, we feel this could be just the beginning…
An equity market collapse and protracted bear market could potentially send silver and gold significantly higher from current levels as investors seek out alternatives.
The ongoing slowdown in China may be a short fuse…
Stocks have been moving higher for years now, years…
At some point, the bull market is likely to come to an end.
So ask yourself: With more possible economic trouble in China ahead and stocks near all time highs, would now be a good time to consider reallocating some capital?
We certainly think so, and think if you look at the scenario objectively that you will agree.
Consider an allocation in gold, silver, and other precious metals today.
Don’t wait for another 2008-like financial crises or for your portfolio to get hammered as stocks collapse. Be proactive.
Fortunately, adding physical gold and silver to your holdings has never been easier than it is today. Have an existing IRA account? Great – you can accumulate physical gold and silver in it. Don’t have an IRA account? No problem – now is a great time to establish a precious metals IRA and begin building your financial future.
Speak with an Advantage Gold account executive now while volatility is low and markets are quiet. This could be the calm before the storm, and planning ahead may potentially help insulate your portfolio from what could be coming down the pike. Don’t ignore the warning signs. Whether it’s China slowing further, the notion of negative interest rates or simply lack of global growth, now may be the time to consider an allocation in alternative asset classes. Explore your options by calling us today at 1-800-341-8584.Tags: add gold to my ira, advantage gold, buy gold, buy silver, china bubble, china slowdown, chinese volatility, diversify your assets, people's bank of china, protect your portfolio