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The One Asset Still Holding Strong

As the value of stocks, crypto, and other assets seemingly disappear, one asset holds the line: Gold. 

Every time the world turns its head to claim a recession is incoming, gold continuously backs its worth by showing itself to be a solid investment. Case in point: Prices for the precious metal may have dipped a bit this year, but they have outperformed all other asset classes as massive amounts of market sell-off continues. 

According to Sam Stovall, a chief investment strategist at CFRA, in a recent interview with Barrons“…owning defensive asset classes such as gold and other inflation hedges tends to hold up better on a relative basis. It’s not that they go up but that they lose less on the way down.”

Mr. Stovall may be onto something. As reported on June 14, a YTD analysis of the SPDR Gold Shares ETF shows a loss of only 1.4%. Compare this to the Invesco QQQ Trust (tracking the NASDAQ-100 Index) and the SPDR S&P 500 (tracking the S&P 500 Index) which have shed 31% and 21% during the same period, respectively. With this, Mr. Stovall seems to be spot on. 

Now that we have your attention as to why you should secure your financial future in gold, many wonder how to even get in on the action. Rohit Savant, the vice president of research at CPM Group says an appropriate entry for gold is when it drops anywhere from $40 to $50. These suggestions come as one troy ounce was recently valued at $1,847. “Over the next year, they’ll be a lot of volatility in prices,” Rohit said. 

Not only are modern economists backing the buying of gold to stay safe, but the continuous history of gold’s safety is unmatched. Gold has a track record of outperforming the total market and a track record of keeping families and their wealth safe in times of uncertainty. Gold spiked +925.07% ($674.60) in January 1980 compared to the S&P 500’s 3.87%. The Dow Jones Industrial Average increased by 24% in July 2020, while Gold increased by 59%. A 5-year period has seen the Dow Jones rose 44%, while Gold has risen 46%. As compared to the S&P 500, Gold outperformed the index with a growth of 345.39% from December 31, 1999, to December 31, 2018. December 2018 saw Gold outperform the S&P 500 once again, gaining 4.93% to the S&P’s 9.18% loss. 2018 was the worst year for stocks since 2008…

In the 1970s, Gold started at just $35 an ounce. It eventually hit a benchmark of a nearly 25-fold increase. Keep in mind the stagflation that took place in the 70s is eerily similar to that of the economic uncertainty we face non. If anything, the 70s proved to the world what investments in gold can do in such situations.


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