What a crazy week!
On Monday, the Dow Jones Industrial Average plunged nearly 1,000 points as fears over the U.S.-China trade war escalated.
Afterward, the Dow bounced back, rallying 3% by Friday’s close.
In their video, they discuss:
- On Monday, one fear indicator spiked to 115 — its highest level since mid-May. From June 3 to July 26, the SPDR S&P 500 exchange-traded fund (NYSE: SPY) returned 9.1%, much to the chagrin of investors who had panic-sold in May. Quote: “As investors, we embrace volatility — we don’t run from volatility. We know that we have a portion of our portfolio that’s in cash that’s just set up for opportunities like this.”
- Investors are seeking safe havens for their money and are buying gold, silver … and bitcoin. These alternative assets gain value when the Federal Reserve cuts interest rates, which it just did on July 31. Quote: “In the crypto markets, it really is just bitcoin that has been moving up. The other sort-of ‘alt-coins’ are kind of staying behind.”
- Speaking of the Fed, expect several more rate cuts by December. The latest data shows 88% of investors expect an additional 50 basis points of cuts by the end of 2019. And many investors anticipate even steeper cuts than that. Quote: “There is some underlying worry — it’s, like, why are we cutting so deeply, and why do we have to do this? — but the initial response is: blastoff, man! It’s melt-up mode!”
Check out Brian and Ian’s 15-minute video for more of their thoughts on the recent market turmoil:
If you’d like to read more about fear indicators, Ian just wrote an excellent article about one particular indicator that investors must pay attention to. You can find it here.
Brian will also cover the market volatility — and some great investment opportunities — in his upcoming article for Sovereign Investor Daily. It’ll be published Thursday afternoon. You don’t want to miss it!
And remember to read below for a wrap-up of this week’s Sovereign Investor Daily articles.
Assistant Managing Editor, Banyan Hill Publishing