Gold Holding Its Own In 2018
A lot of people have been talking about the stock market. Everyone thinks that the stock market is about to crash, but funny enough, no one is doing a thing about it. Many current investors are bearish about gold and constantly looking for signals of the Great Unwind. According to fund managers the Bank of America Merrill Lynch’s end-of-year surveys, fund managers should be doubling down on stocks and buying precious metals. Should you be worried? You should be if you have more stocks than precious metals in your investment portfolio.
A lot of experienced asset managers worked through the last global financial crisis, which happened over a decade ago. This means they have experience of getting through a catastrophic banking crash and would know how to weather the storm. Most will tell you that gold is safe and always keeps its value. Through the worst of times, gold always has value. No matter how late you get in the game when a crisis is looming, gold will keep paying.
Have you ever heard the analogy that you shouldn’t wait for your house to burn down before you get insurance? The same can be said about your own money, you don’t wait for a crisis before you protect it. Remember the times when things were really bad for the stock price like the 1987 Black Monday that saw share crashing through the floor and diversify your investment portfolio by buying gold. Think of gold as your insurance. When the economy goes up in flames.
Gold is a protective measure against shares slumping. The metal does not really change much, but sits there accruing more value. The question of how much gold you should be buying to mitigate economic risks this year you need to ask two fundamental questions:
Will the stock market stop going up in 2018? So it drops, how far will it drop? What will central banks do?
Put geopolitical risks on the back burner. Don’t obsess about mining supplies and don’t worry about demand from the big consumers like China and India the demand from the big consumers. In fact, China has been increasing like China and India go down?
No one knows for sure, but there is a lot of speculation. The only thing that everyone is sure of about the market is that 2018, will be the longest time that equities have been bullish in the US if things continues the way they have until the end of the year. If by the end of December equities go into a slump or crash or turn bearish, how will the US Fed react?
It may tighten its policies to put a dent in the bull market. It may loosen its policies, but may make gold more appealing. The rally we’ve seen so far may trigger the implementation of weaker policies. Gold is holding its own alongside all-time stock market highs. Most money managers are buying gold as a precaution for the bumpy ride everyone sees coming. It’s not just big moneyed investors who are buying gold, but private citizens are waking up to the new reality that gold is the best bet in an uncertain future.