December 7, 2012
Just in time for Christmas, consumer sentiment in America is taking a nosedive.
Americans are increasingly worried about the outlook for the economy, largely due to the fiscal cliff which is only about a month away.
This decline in morale has implications for the financial markets. It is difficult to see positive action in the stock market with Americans so worried about their futures.
In contrast, historically, hard assets, particularly gold investments, have appreciated during periods when Americans are worried, providing a degree of protection against bad times.
December 6, 2012
In another indication that the financial markets are resting on shifting sands, the tech world’s darling, Apple Computer, has now seen its stock fall precipitously, as we reported previously. Now, however, the stock has experienced its worst decline in 4 years.
Investors should take this as a warning that they need to diversify into investments that are not positively correlated with stocks. Gold investments, such as rare gold coins, have historically moved independently of the stock market, making them an ideal diversifier for a balanced investment portfolio…
November 16, 2012
Despite very questionable economic news, the stock market has appreciated in much of 2012. It was led principally by Apple Computer, the darling of the tech industry.
In case you haven’t noticed, Apple is in trouble now. It’s stock is down, way down from its highs. In fact, Apple shares have fallen 25% since late September. Yesterday the stock fell 2.4%.
Investors must consider whether or not Apple is the “canary in the mineshaft.”
How can a company whose shares investors chased up 74% in a year suddenly fall out of favor like it has?
Something is spooking investors. And we suggest that that something should not be viewed as exclusive to Apple. The stock market is vulnerable and investors should diversify into assets that are not closely correlated with stocks.
Rare gold coins are particularly useful in this regard.
November 13, 2012
As many readers already know, due to long-term irresponsible fiscal policies, the US government finds itself headed to the edge of a so-called “fiscal cliff.”
Policymakers in Washington are trying to strike a deal to head off the carnage, but their track record is awful on such deals. What we are soon to be faced with is a combination of large budget cuts and sizable tax increases, which will kick in if nothing is done.
Faced with the possibility of tax hikes, America’s wealthy investors are taking action ahead of time and it isn’t good news for the markets; wealthy investors are liquidating stocks, real estate and even whole businesses to avoid higher tax rates in the future. This is obviously terrible news for the stock market, the real estate market and the economy as a whole, creating the type of environment in which hard assets, such as gold coins, thrive.
Meanwhile, long-time market analyst, Marc Faber of The Gloom Boom and Doom Report actually says that there will be no fiscal “cliff.” Nevertheless, he predicts that corporate profits are certain to disappoint, resulting in a stock market decline of 20% or more. Faber points to Apple Computer as a leading indicator; Apple’s stock has fallen 20% in recent months already.