The markets are ending the year on what can only be called a sour note. Stocks are either in or on the verge of entering bear market territory and the potential downside could be just getting started. Measures of market volatility are also highly elevated and could potentially be indicative of further selling pressure in the months ahead.
The potential risks facing the economy and global stock markets are immense. The ongoing war over trade, the potential fallout from a hard “Brexit,” higher interest rates and other geopolitical risks will all likely weigh heavily on risk assets as the new trading year gets underway.
The risk of recession in the U.S. may also be on the rise. The nation is already at what most consider to be full-employment. Some key economic indicators have already begun to exhibit some softness in the data. Higher interest rates are a major obstacle for real estate markets. A stronger dollar has put a damper on companies that do business internationally. The effects of tax cuts and government spending appear to be wearing off. In addition to so many domestic issues, the global slowdown is already being felt as key markets such as China appear to be on the decline.
Markets have had a great run over the last decade without question. Markets tend to be cyclical in nature, however, and the cycle appears ready to change. Stocks and other risk assets could find themselves in deep bear markets in the months ahead, while perceived safe-haven asset classes could potentially outperform significantly.
The writing is on the wall. Markets have already shown an inability to hold any significant rallies, and investor sentiment has largely shifted from “risk-on” to “risk-off.” If these current trends continue into the New Year, stock investors could not just be looking at declines of 10 or 20% but could potentially see far more drastic declines of 30, 40, even 50% or more.
That is why now may be the ideal time to add diversification and to look at alternatives. Given the current state of the economic and geopolitical landscapes, there may be no better asset class to be adding right now than physical gold.
Gold not only comes with immense upside price potential, but it may provide other key benefits as well. Gold has long been considered an inflation hedge, and the metal could potentially strengthen as inflation accelerates and the dollar weakens. Given the current challenges faced by the economy, not only might the Fed not raise rates again next year, but cutting rates again is entirely plausible. Such a move could potentially send the dollar sharply lower, while allowing the negative effects of inflation to eat away at consumers’ purchasing power.
The gold market has already begun to move higher as stocks have embarked on what could be the next major bear market. Fortunately, it’s not too late to get involved in this key asset class.
Speak with an Advantage Gold account executive today about the potential benefits of gold ownership. Our account executives are here to answer any questions you may have and can even show you how to build a significant stockpile of this key asset class using an IRA account.
Don’t wait for the next major wave of selling in stocks or for the next recession to take hold before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: 2019, advantage gold, brexit, china, gold, higher interest rates, market volatility, new year