Stocks are continuing their recent plunge today, with the Dow Jones Industrial Average down over 600 points in mid-day trade. Market volatility, as measured by the CBOE’s VIX index, is spiking today to the mid-20s and investors appear to be getting panicky as no bottom has yet been found.
The recent selling in equities could, however, be just the tip of the iceberg and a far more significant decline could be seen in the weeks and months ahead. Despite some recent positive commentary on the trade war following a dinner between President Trump and Chinese leader Xi Jinping last weekend, the war on trade could potentially not only come to an end but could see further escalation in the new year.
Yesterday’s arrest of a top executive of Chinese tech giant Huawei is not going to help the situation either, and could exacerbate already tense negotiations. The Chinese government has made clear its displeasure with the development, and if not resolved quickly could put any further negotiations on trade at a standstill.
Then of course there is also worries over the inverted yield-curve. As the curve becomes inverted, short-term rates yield more than long-term rates. This scenario is indicative of lower long-term rate expectations and is often viewed as a precursor to economic recession.
As if trade and rates are not enough, there is also the ongoing Brexit debacle. It remains unclear how Brexit will play out, but the situation does have the potential to rattle global financial markets and cause a further spike in volatility.
The writing is on the wall, and it is now up to investors to decide what to do given the perilous economic and geopolitical outlook. An objective look at equities could indicate a lot of additional downside before the rout is over. Investors can, however, look to put capital to work in alternatives before it gets worse.
Given the current backdrop of geopolitical risks, rising inflation, an increasingly dovish Fed and rising market volatility, hard assets like gold may be the best bet.
Gold has already begun marching higher, and is currently at near-term resistance at the October highs. A breach above this level could set the stage for the next major bull market in the metal just as stocks embark on what could be a major bear market. Not only does gold have tremendous upside potential from current levels, but it also may act as an important hedge against accelerating inflation, a weakening dollar and geopolitical risks.
Adding this key asset class to your portfolio has never been easier, and there has probably never been a better time to get started. Speak with an Advantage Gold account executive today about the potential benefits of gold ownership and how this asset may play a key role in the months and years ahead. Our associates are here to answer any questions you may have, and can even show you how easy it is to build a significant allocation using your IRA account.
Don’t wait for the stock market collapse to erase more wealth before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, brexit, china, gold, inverted yield curve, recession, stock market collapse, trade war, vix, volatility