The next major market downturn could make the market meltdown of 2008 and 2009 seem like a walk in the park. There are numerous potential issues that could fuel a major sell-off in stocks and risk assets, and declines well into the double digits are a distinct possibility.
Gold is often referred to as a type of portfolio insurance, and now may be the ideal time to consider adding this key asset class to your portfolio. Before you shrug off the notion of owning hard assets like gold and silver, you should consider some of the key ramifications that could make the next sell-off the most brutal ever seen.
- Markets are higher-way higher: The stock market has been on a run higher for nearly ten years now. During that time, the broad market S&P 500 has made fresh all-time highs on numerous occasions. Markets have thus far not seen a major correction of any significance during this time period, and remain not far from all-time highs. Like a deep well, there is a long way for markets to fall at this point, and the lack of any previous major corrections could mean markets might see a swift and severe sell-off that could see the S&P 500 cut by half or even more.
- The Fed may not have the tools to fight: You have to keep in mind that the Fed just started raising interest rates, and any further rate hikes are likely to be extremely slow and incremental-if they happen at all. This may present an interesting conundrum for the central bank, however, as it only has the ability to lower rates down to zero. Although the bank can technically take rates into negative territory if it chooses to do so, many question the effectiveness of such strategies while also pointing out some of the potential pitfalls. The bottom line? The Fed could have to resort to massive QE once again even though its effectiveness is still being questioned today.
- Markets will eventually return to fair value: It’s no secret that the stock market has been propped up by loose monetary policy by global central banks along with hundreds of billions in quantitative easing programs. QE has come to an end in the U.S. -for now anyway- but it does continue to be used in other areas of the world. Low yields and massive bond buying have essentially forced many investors into stocks in order to try to achieve any worthwhile return. Once the equities market is no longer the only game in town, this could change, and fast. Markets have a funny way of correcting themselves, and equity markets are no exception. Once this “correction” really gets under way, look out below.
The next major blowout could be one for the history books, and you will likely not want to be 100% invested in stocks when it comes. Now is the ideal time to consider some alternatives, and physical metals are a great place to start.
Gold and silver have the potential to outperform during a major market crash or bear market. Not only that, but these asset classes can also potentially provide a meaningful hedge against declining currency values, inflation and geopolitical risks.
Adding gold and silver to your portfolio has never been easier than it is today. Speak with an Advantage Gold account executive today about the potential benefits of gold and silver ownership. Our associates are here to answer any questions you may have, and can even show you how to use your IRA to buy and hold real, precious metals.
Don’t think that crash like 2008/2009 cannot occur again in today’s markets. Not only could another crash hit, but its effects could be devastating to your portfolio. Don’t delay. Explore your options for gold and silver ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, equities bull market, gold, monetary policy, portfolio insurance, qe