Some analysts have been sounding the alarm bells for a drop in stocks for some time now. Although equities have not thus far fallen apart as some had suggested, the situation has become increasingly cautious.
Another analyst recently came out with a call for an 18% drop in stocks. This, however, is one analyst you may want to listen to. His name is Gary Shilling, and he has a knack for calling turning points in the economy. Having called major turns in the 60s, then in the early 90s, Shilling then became widely recognized for calling the hosing bust of 2008.
Numerous Recessionary Indicators
According to a recent op-ed penned for Bloomberg News, Shilling calls for a recession and gives a business downturn this year about a two-thirds probability. Shilling says that the recessionary indicators are numerous. He cites tighter monetary policy by the Fed, a nearly-inverted yield curve, soft consumer spending, weaker housing and the tiny increase in non-farm payrolls for February as just a few reasons. Shilling also discusses the fragility of the European economies, a Chinese slowdown and the ongoing U.S./China trade war as other factors.
Shilling went on to discuss the post-WWII recessions and some of the circumstances that drove them. He then stated that several of them, however, were not due to major financial or economic excesses, but rather the normal late economic cycle business and investor overconfidence. He then stated that the average drop for the S&P in eight of the post-WWII recessions was 21.2 percent.
Bear Market Territory Ahead
By Shilling’s calculations, the broad market S&P could stand to decline by about 21.2 percent, putting it into bear market territory. Such a decline would represent a drop of about 18 percent from Friday’s close, but would not be much lower than the low posted on Christmas Eve. This would put the S&P around 2351-or about 500 points lower than where it stands today.
As the number of economists and analysts calling for recession and drop in stocks continues, it is time for investors to heed the warning. The stock market could be simply a house of cards ready to collapse, and now is the time to take action.
Against the current backdrop of economic and geopolitical risks, as well as a dovish Fed and the potential for a weaker dollar, there may be no better asset class to turn to than physical gold.
Is the Gold Market Ready to Blast Off?
As stocks exhaust the final phases of the aging bull market, the gold market appears ready to blast off and embark on the next significant bull market. It’s not too late to get involved, however, and adding this key asset class to your portfolio has never been easier.
Just pick up the phone and speak with an Advantage Gold account executive today. 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 in this key asset class using an IRA account.
Don’t wait for the next recession to take hold and for stocks to plunge again. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: 401k gold, add gold to my ira, advantage gold, bear market, best gold companies, best gold dealers, best gold ira, buy gold, gary shilling, inverted yield curve, recession, soft consumer spending, tighter monetary policy, weaker housing