The stock market is due for a fall. Numerous market observers and analysts tell us so, but even without their wisdom, our own abilities to discern the obvious are enough.
The bull market has been charging for over nine years now, making it the second-longest on record, and very aged.
Besides that, a variety of adverse economic conditions are beginning to assemble on the horizon. Interest rate hikes. A trade war. Massive levels of household debt that outsize even that which existed back in 2008, when it all went south last time.
And now we’re starting to see articles written by staff writers at popular financial media websites designed to tell us how we can emerge successfully from the coming crash.
These pieces are certainly well-intentioned, but often suffer from a fatal flaw that leaves the information dispensed not nearly as helpful as it could be: the advice is invariably rooted in the realm of traditional assets.
Take, for example, one article that was recently posted to the popular Motley Fool website. Titled “How to Protect Your Assets Against a Stock Market Crash,” I was hopeful the piece would pay some deserved attention to the potential of gold and silver in helping a portfolio not only mitigate the effects of a slide in the equities markets, but achieve significant growth during, or in the immediate wake of, a financial crisis.
Instead, this article focused on debt securities – bonds – as the principal asset alternative to equities when economic upheaval ensues. In fact, the piece makes no explicit mention of gold and silver, or even precious metals, in general, as a viable option for investors. The closest it comes to doing so is it to say, at one point, that “…other assets like real estate and commodities can move independently of stocks during crashes.”
The suggested alternative of the author is long-term bonds. To justify his suggestion, he points out that during the last four months of 2008 – in the midst of the previous financial crisis – long-term bonds rose nearly 30 percent as the stock market fell about as much.
That’s true. That happened. But the Great Recession was a global event, and lasted into the early 2010s. On that note, here’s a chart that shows the performance of gold, long-term bonds (as proxied by the same iShares 20+ Year Treasury Bond ETF the author cites – symbol: TLT), and the Dow Jones Industrial Average (symbol: $INDU) from September 2008 through Q2 2011:
Performance of Gold, Long Term Bonds, and DJIA – September 2008 through June 2011
Chart Courtesy of StockCharts.com
Given the opportunity to be in gold, long-term bonds, or equities during these years, which would you be inclined to choose?
People who dwell in the realm of traditional assets often struggle with embracing other investment options, and that’s a shame. Alternative assets like gold and silver have tremendous potential to not only help portfolios tread water in stormy seas, but make solid, forward progress despite those dangerous conditions. If you would like to learn more about the role that inflation-protected physical gold and silver can potentially play in helping your IRA or 401(k) push ahead in the next financial crisis, I encourage you to give Augusta Precious Metals a call at 855-976-5436. Ask to speak with one of our retirement specialists, who can answer all of your questions about enhancing portfolio safety with gold and silver.
The next bear market is on the way, and the key to preserving your retirement goals may well depend on your willingness to step (slightly) outside what has become the box of investing, and take a good look at non-securitized alternative assets like physical gold and silver.