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Insuring A Frail Future

“Keep your eyes focused on what is right, and look straight ahead to what is good.”

— PROVERBS 4:25

At approximately 4AM EST last night, over $2.2B ETF’s in gold were sold off in 2.5 seconds. Bloomberg labels this a “fat finger” as gold slid down $18 during that 2.5 second span . . . seems suspect to me. Currently gold and silver slowly rebound, because there was no news to prompt the major selling in the first place. Gold and silver lost value 39 of the last 41 years in the month of June. Take this as a buying opportunity as prices tend to ramp up after the 4th of July.

Short-term outlooks aside, let’s focus on long-term. Geopolitical threats generate a lot of buzz about gold, creating not only faith in the yellow metal but demand for it as well. In the midst of tensions with North Korea, investigations with Russia and an increase in terrorist attacks globally, gold has become more attractive than ever. Each one of these events has the ability to force gold higher.

Our long-term gold schedules tell us to keep our eyes to the future. August and September look to be the tipping point for precious metals. It is then that we may finally begin to see the balance between reality and what is not. When the stock market bubbles finally do burst, we may experience one of the biggest wealth transfers of our lifetimes.

Interest will continue to build for precious metals as people begin to look for a safe haven and an investment that is an actual store of value. So what does that mean for you as a financial advisor? It means it is time to accumulate and better position yourself and your clients into precious metals. Bet against debt and become your own central bank.

Judging by the gold-to-silver ratio, industrial value and store of wealth, I think silver is going to be the star performer in the precious metals industry. Investing 10% of your clients’ investable portfolio into gold and silver will help offset losses assessed in the marketplace. If you are not actively offering this to your clients, you risk the longevity of their wealth. Exchange traded funds (ETF) are not good enough. GLD is leveraged out 504 to 1. An ETF will not insure your clients’ wealth in times of economic crisis.

All economic crises aside, our equity markets are now in the midst of a 99-month bull market rally—the second longest in our vast history. How much higher can it go? In order to continue the “hopium” from the Trump stock market rally, markets need a healthy pullback. Without that, we are rapidly approaching bubble territory, if we’ve not already arrived.

Insure your clients’ wealth with physical gold and silver.

Over the last 20 years, silver dollars averaged over a 16% return each year. During times like the 2008 crisis, we saw silver dollars rise from $7 per coin to over $60 in the span of two years. When everything else crashed—our markets, real estate, etc.— silver, especially, functioned as wealth insurance.

We don’t have a crystal ball to predict the future—geopolitical, stock market or otherwise—but we do have wisdom that is informed by history. Both distant and recent, history demonstrates time and again that precious metals are the right way to insure clients’ wealth.