The past week has seen an enormous increase in stock market volatility. In just two sessions, the Dow Jones Industrial Average shed nearly 1400 points, and the NASDAQ officially entered correction territory on Thursday.
The sharp and rapid rise in interest rates has been pinned as the primary culprit for the sell-off, and things could be just getting started. Although stocks are sharply higher in early trade on Friday, the rally being seen could simply be more of a relief rally than anything else. The increase in yields has likely not yet run its course, and some have suggested that the benchmark ten-year note could hit the four percent yield mark before the rally runs out of steam.
The subject of higher yields has been the topic of much debate recently, in fact, even President Trump has weighed in several times. The President has suggested that the Fed is moving too far too fast, and has suggested that the recent declines in stocks are because of the central bank’s rate hikes. While this may or may not be true, higher yields are certainly playing a role in the recent selling and some have made their opinions clear that higher rates could crater the stock market.
While the declines in equities seen in recent days has been substantial, it could only be the tip of the iceberg at this point. It is important to keep in mind that stocks have been moving higher for about a decade now, and some have suggested that the rally in stocks was due in no small part to extremely accommodating monetary policies both in the U.S. and elsewhere. Now that the punchbowl has been taken away, it appears that investors are beginning to start to panic.
Not only do rising rates present a significant risk to stocks, but investors may also have to contend with rising inflation and higher risk of recession. It would seem that any way you slice it, the day of reckoning for the stock bull could be here, or quickly approaching. That is why right now may be the ideal time to take a step back, and examine some alternatives that may potentially outperform during the next major downturn. If you are looking for ideas, just take a look at what the gold market has done in recent days.
The gold market has been paying attention, and investors have begun jumping into the metal as risk aversion takes hold. Gold saw a rapid rise this week from around $1185 per ounce to over $1220 per ounce, in a move that could be the very beginnings of the next major bull market. And what better asset class to go to than gold-which may not only appreciate in value but may also potentially provide a hedge against a weaker dollar and accelerating inflation.
The stock market is now tipping its hand, and it is time to act.
Speak with an Advantage Gold account executive today about the potential benefits of gold ownership. Our associates are here to answer any questions you may have, and can even show you how easy it is to accumulate a significant allocation in this key asset class using your IRA account.
Don’t wait for the next major leg lower in stocks or for the next great recession to take hold before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, Fed, gold, higher yields, interest rates, sell-off, stock market collapse