I will likely open a position in Gold, or perhaps Gold Miners…but not just yet.
Note the below two charts, they illustrate what typically happens during a major Market meltdown- not only does the Stock Market drop, but essentially everything else does too, including Gold.
So…if you think the worst is yet to come, then perhaps holding off on purchasing ANYTHING is a good idea.
It’s also worth noting from the charts that, once the crisis bottom has occur, Markets tend to equalize. Gold & S&P 500 tend to have matched outcomes; sometimes one leads or lags the other…so market timing can be crucial.
As the old saying goes- a rising tide lifts all boats. This is because an asset class’s performance is generally linked to MONEY LIQUIDITY. [ more about that in a future post ]
It’s best not to be DOGMATIC about the purity of a singular asset class. Opportunity seldom is limited to just one thing. So during this time of distress, keep an open mind and be nimble.
Speaking of being nimble…for now, it looks like the “Banking Crisis” only lasted about 10 days. We’re not witnessing a failure of the financial system, the system is performing exactly the way the Central Planners have designed it. They’ll make the most of this “crisis”…how about you?
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