On the first trading day of the New Year, stocks are set to once again tumble at the open. Premarket trading points to around a 400-point decline for the Dow Jones Industrial Average right out of the gate while the tech-heavy Nasdaq is set to drop over 140 points. An ugly start to the new trading year to say the least.
The selling is being fueled by many of the same factors that has fueled selling in recent weeks: The potential for a global economic slowdown, the trade war with China, higher interest rates and geopolitical concerns. Overnight, more fresh data out of China showed weakness as the Caixin manufacturing purchasing managers index declined to 49.7 in December. This reading marked the lowest level for the gauge since 2017 and seems to suggest that the sector is contracting.
The poor reading did not go unnoticed by investors either, as Asian markets tumbled. As U.S. markets get ready to open, the increasing threat of a significant slowdown in China is front-and-center and could continue to weigh further on stock prices and investor sentiment.
As equities enter or fall deeper into bear market territory, an increasing number of investors could eventually throw in the towel, sending prices even lower. The outlook ahead for stocks is murky indeed, and equities could be on their way not only to further declines but also to an extended period of poor or negative returns. The bull market in stocks ran about a decade and there is no reason that the next bear market cannot run just as long.
Against the backdrop of slowing global growth and increasing recession risk, now is the time to add diversity with asset classes that could potentially benefit under such scenarios. Given the threat of accelerating inflation, dollar weakness and declines in risk assets, there may be no better asset class to add right now than physical gold.
Gold may not only potentially see significant price gains but may also provide other benefits as well. The metal is widely considered to be an effective hedge against increasing inflation and could potentially gain in value as the dollar weakens. Unlike stocks, bonds or other “paper” asset classes, physical gold carries no counterparty risk and cannot default or go bankrupt. It has a long history as a reliable store of value and is considered by some to be the only true form of money there is.
Adding physical gold to your portfolio has never been easier. Speak with an Advantage Gold account executive today about the potential benefits of gold ownership and to learn more about the key role this asset class may play in a portfolio. Our account executives are here to answer any questions you may have and can even show you how easy it is to build a significant allocation in gold using an IRA account.
Don’t wait for the next major recession to take hold or for the next major of stock declines before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, bear market, caixin, china, gold, new year, purchasing managers index