Gold Is Your Safety Net in Moments of Chaos
Can it go much higher?
Should I take profits now?
Should I move everything to cash?
These were the big questions that everyone was asking at the recent Total Wealth Symposium. (Well, that and wondering why Matt Badiali was excited to see so much hate for the oil industry.)
The U.S. stock market has enjoyed a nice run over the past several years. Stocks have been in a bull market far longer than anyone’s anticipated. It’s become a competition among the talking heads to see who can call the top first.
But does it really matter who can call the best top to the market?
The thing you should be worried about is if your portfolio is prepared, whether the top happens tomorrow or in six months…
The Hedge Against a Correction
Gold remains the preferred hedge against uncertainty in the market. It holds and grows in value when the market appears poised for a sharp correction.
And this year, demand for physical gold continues to be strong. The World Gold Council revealed that the total gold bar and coin demand has jumped 13% on a year-over-year basis, and in the second quarter to 240.8 tons.
Many investors around the globe are adding physical gold to their assets for three big reasons:
- Mountains of debt. The globe is sitting on an astronomical pile of debt. Not only have governments around the world loaded up on debt to recover from the Great Recession, but we’ve used cheap money to borrow and invest. Margin debt is sitting at levels never witnessed before. Should the market suffer a correction, it could be further fueled by investors selling positions to cover their margin debt.
- Rising interest rates. Interest rates are finally on the rise. The Federal Reserve is lifting rates from bargain-basement levels and is poised to issue another increase in December. If the Fed continues on its usual course, it will raise too far, too fast yet again, successfully derailing any economic growth that we’ve enjoyed. In addition, America is no longer the only one lifting rates. Canada recently boosted its interest rate, and the U.K. has started dropping hints that its first rate hike in years is just around the corner. The global economy is facing a new shake-up that gold can help hedge against.
- Geopolitical uncertainty. Questions about the health of the economy, the length of the bull market’s run, fighting in Washington, terrorist attacks, natural disasters, potential war with North Korea and more have left investors on edge, waiting for the next black swan event to swoop in and send the market crashing. In moments of chaos and destruction, gold is the safety net you want to have in place. Stocks plummet and bonds implode. Gold holds its value and even climbs.
A Safe Place for Your Gold
Acquiring gold coins or bars and storing them doesn’t have to be a difficult process.
One option is New Zealand Vault — an independently owned company that runs safe-deposit vaults located in Auckland and Wellington, New Zealand. With a stable government and banking system, New Zealand offers a secure location to store your wealth away from the hot spots of the world.
New Zealand Vault has developed a unique process that allows clients from anywhere in the world to open a safe-deposit box online, purchase bullion and have it deposited into their own private safe-deposit box.
In addition, New Zealand Vault is an authorized distributor for the Perth Mint and several of the world’s largest bullion wholesalers, which gives its clients access to all the major mints of the world. These include the Royal Canadian Mint, the U.S. Mint, Swiss PAMP and Johnson Matthey.
For full details on New Zealand Vault, you can visit the website at https://www.nzvault.com.
Another avenue for adding physical gold to your portfolio is the EverBank non-FDIC insured Metals Select® Allocated Account. It’s a great way to increase your own economic power. It allows you to purchase specific coins and bars, and it’s even IRA eligible (gold and silver American Eagle coins only).
For the sake of full disclosure, we receive a marketing fee based on our relationship with EverBank. But honestly, we’d work with them regardless.
Sr. Managing Editor, Sovereign Investor Daily
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