Investing
Investors who have been in gold markets for a while understand that the gold price is often quite cyclical. Like other markets, it can experience price rises and falls even while its overall trend is upward. Now an investing expert who called gold’s bear market has come out proclaiming that gold’s bull market has at least another decade to run.
Yes, gold may be trading off its all-time highs, but it still is in the middle of a 20-year bull market that isn’t stopping anytime soon. Over the past 20 years gold has been the second-best performing asset overall, coming in only behind real estate investment trusts (REITs). Gold’s performance has been nearly double that of stock markets, outperforming the Dow Jones and the S&P 500.
Bert Dohmen from Dohmen Capital Research correctly called gold’s bear market of the 1980s and 1990s. He also called for a 30-year bull market after that bear market, which would mean that gold will continue to rise in price for at least the next decade.
One key thing that investors need to realize is that gold can lose some value during a credit crunch. As Dohmen pointed out, gold lost 31% of its value in 2008 as investors rushed out of all assets and into cash. But it’s important to remember that: 1.) that was just 2008, and; 2.) it provided a major buying opportunity to those investors who were ready to buy.
Overall, from late 2007 when stock markets peaked to March 2009 when they hit their trough, gold was up 25% during the crisis while stocks were down over 50%. Even more importantly, gold continued to rise from there before hitting its all-time highs a couple years later.
That’s why investors who may be fretting about gold’s performance this year have nothing to worry about. Patience is the key when investing in gold, and those whose investing horizons are long-term reap the benefits. Right now is the time to buy gold, before it starts its inevitable rise in price. With all incoming data indicating a worsening trade war and a coming stock market crash, gold is the place to be for any investors looking to protect their retirement savings.
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