Investors may be completely unprepared for market volatility at this point. It has been a long time since the market saw a 5% decline, and markets have not seen a significant pullback of any kind in years.
This has kept a lid on market volatility as measured by the CBOE’s VIX. You don’t need the VIX gauge, however, to tell that markets have seen very little in terms of large price swings. In fact, stocks have gone sideways to higher for quite some time. Perhaps investors feel quite comfortable that rates will remain low and that further stock gains are there’s for the taking.
This could potentially set up a major domino effect. If –or perhaps when- markets do a get good whiff of volatility, many of these investors may be the first to panic. As the panic increases, it can result in more investors deciding to cash out of equities and thus exacerbate the selling.
Put another way, markets have moved sharply higher in recent years and it almost seems like stock investors are standing at the edge of a very, very steep cliff. The cliff is also very high, and once a rock rolls over the edge there is nothing to stop the boulder from gaining speed and strength until it reaches the bottom.
This could potentially be the exact scenario seen when the stock market bubble is finally popped. And you will not want to be on the trail when the boulder comes rolling down.
Why is this so important? For two reasons: 1). If you are invested heavily in stocks still at this point, now may be the time to consider lightening up or diversifying. 2). If you are chasing this bull market higher as it nears its tenth anniversary, you really may want to think twice.
The market is still sucking in unknowing investors even today, but as markets often do, it will reverse course once the last investor has finally gotten long. We are of the opinion that the last investor has already bought or will be buying very soon. That being said, the market’s days of moving higher could be coming to a close, and fast.
Remember how quickly stocks fell in 2008? Remember what it feels like when the Dow drops 1000 points in a day? Those days could be seen again, and soon.
Now is the time to be proactive and diversify your holdings with assets that may potentially outperform during a stock market crash or protracted bear market. Now may be the ideal time to consider an alternative asset class like physical gold.
Not only does gold have the potential for massive price appreciation during a stock market crises, but it may also provide a meaningful hedge against a declining dollar index or rising inflation. Gold has been widely considered a reliable store of wealth and value for thousands of years, and is often sought out during times of economic or geopolitical distress.
Speak with an Advantage Gold account executive today about the potential benefits of physical gold ownership. Our associates are here to answer any questions you may have, and can even show you how to buy and hold real, physical gold using your IRA account.
Don’t wait for the next major stock market implosion before taking action. Explore your options for physical gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, dow, gold, stock market bubble, vix, volatility