Is Now The Time to Buy Gold
Is now the time to buy gold? It seems that everywhere we look these days there is conflict. The world is currently seeing strained U.S. /Russian ties, North Korean tensions, Israel and Hamas at war, Russia and Ukraine at war, and civil war in Iraq to name a few. We are living in very uncertain times, and one has to wonder just how much investors are willing to tolerate before running for the hills. Stocks have been trending higher for years now-years… Stocks also appear to be very overbought at this point. Could the current geopolitical backdrop be the catalyst for a significant stock sell-off as risk aversion continues to set in? We think so. We also think that as risk aversion sets in, investors may look for alternative places to put cash to work. This asset reallocation could potentially be a huge benefit to and driver of gold and silver prices.
WHAT ARE SOME OF THE EXPERTS SAYING?
The stock market bears appear to be coming to life. For some time now, some financial experts have been calling for a top in the current rally in stocks, and that topping process may very well be underway already. According to stock market analyst and mutual fund manager John Hussman, the current rally in stocks is another bubble. Hussman stated “Make no mistake-this is an equity bubble, and a highly advanced one. On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme.” Needless to say-that sounds pretty extreme. Such a pullback or crash in stocks could potentially wipe out all of the gains seen in the last several years. Many analysts attribute the stock market’s frothiness to lose central bank policies and the central banks having held interest rates at or near zero for many years beyond what was necessary. As the Fed now looks to unwind that mistake, recent interest rate hikes have had a bearish effect on markets and may continue to do so as long as rates are rising.
Whatever the case may be, the market does appear to be overbought and one must consider the possibility of a top and or significant drop in equities. Obviously, there is a great deal of concern right now regarding the current state of affairs in many places around the globe. The situation in Ukraine does not appear to be going away anytime soon. Tensions between the U.S. and Russia appear to be at their highest levels since the cold war. North Korea is a source of tension.
Needless to say, any one of these situations has the potential to cause great stress on global markets. Famous commodity investor Jim Rogers was recently discussing the geopolitical landscape among other things and had this to say: “War is not good for anything except for real assets, because people need real assets during the time of war, whether they are involved in the war or just protecting themselves.” Rogers also added that in times of war, you purchase gold, oil and other commodities. While gold has not over performed in recent months, we believe that the metal is simply in consolidation mode before making another leg higher. If current trends continue, we also believe that gold, silver and precious metals could stand to potentially benefit greatly as investors look to reallocate capital and seek out perceived safe-haven assets.
If you are looking to diversify your portfolio, we recommend considering an allocation in precious metals. Contact an Advantage Gold specialist today and find out how to rollover your 401k into a Gold IRA by opening a self-directed IRA account, contact us or call us at 800-341-8584 today.