In case you missed it, numerous economic indicators are now flashing red. The latest indicator to show weakness was today’s non-farm payrolls report. The U.S. added just 75,000 jobs last month, while consensus estimates were looking for a gain of about 177,000 jobs. The figures for March and April were also revised lower, and wage pressures were muted with average hourly earnings rising less than expected.
The risk of recession is clearly on the rise, and now is the time to diversify with asset classes that may potentially outperform during a protracted slowdown.
Here are three reasons that gold ought to be at the top of the list:
- Gold may offer significant upside potential: As investors exit equity markets in droves, all that capital needs to find other places to be put to work. Once the exodus from stocks gets going, hard assets like physical gold could see significant inflows causing sharply higher prices. As stocks move lower, yields will also likely work their way lower offering little to nothing in return. This makes gold a logical choice that may offer far more return potential compared to other asset classes.
- Gold may provide a hedge against inflation: As the next major recession gets going, the Federal reserve will do what it can to combat the slowdown. It already appears that lower rates are on the way-as soon as next month-and markets are now pricing in additional rate cuts throughout the year. As the Fed cuts rates and possibly implements another round of QE, the dollar will likely see a steep decline. As the greenback falls in value, each dollar buys less goods and services. Physical gold, on the other hand, may potentially benefit from a weaker dollar and may help to preserve wealth and purchasing power.
- Gold may add diversity: As the next recession gains steam, it will become increasingly important for investors to be diversified. A simple portfolio of stocks and bonds will no longer cut it, especially in a lower interest rate environment. Gold carries no counterparty risk and is considered by many to be the only true form of money there is. Global central banks, the largest financial institutions on the planet, recognize gold’s importance as a diversification tool-maybe you should too.
The economy and stock market have been expanding for a decade now.
The current economic expansion is getting long in the tooth, and the current state of global trade is only adding fuel to the fire.
Stocks have also begun to show serious cracks and could have a long way to fall once the dominos start dropping. The next recession is on the way, and it could be even longer and nastier than the last.
It’s not too late to act, however. Now may be the ideal time to diversify with gold and to get your portfolio squared away before things get ugly. Adding gold to your portfolio has never been easier, and perhaps never more important.
Speak with an Advantage Gold account executive today about the potential benefits of gold ownership. Our associates are here to answer any questions you may have and can even show you how to build a significant allocation using an IRA account.
Don’t wait for the next major recession to take hold or for stocks to come crashing down before taking action. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: economic indicator, economic slowdown, global central banks, hedge against inflation, next recession, portfolio diversification, upside potential