Forbes Article On Gold Outperforming Stock Market
Written by Frank Holmes & originally published Jan 3, 2019 on Forbes.com.
The mainstream media is finally coming around to figuring out what we’ve known for years: that gold is a superior investment to stocks. A recent article in Forbes underscores the case for gold, stating that the yellow metal looks to be a solid bet for investors looking for improved portfolio performance in 2019.
In the month of December gold outperformed the S&P 500 Index by over 15%, booking a nearly 5% gain for the month whereas the S&P Index lost over 9%. Gold’s performance in the 4th quarter of 2018 was even more outstanding, besting the S&P 500 Index by over 25%. That meant a gain for gold of over 7.5% whereas the S&P Index lost 14%.
With every indication that stock markets will continue to demonstrate weakness throughout 2019, that means that gold should continue to outperform stock markets significantly just as it did throughout the 2007-09 financial crisis period. Of course none of this should come as a surprise to experienced gold investors, who know that gold has performed nearly twice as well annually on average as stock markets since the beginning of the century, resulting in nearly five times the total price growth over the last 20 years.
Among the reasons for gold’s amazing run in the 4th quarter and continued strong performance in 2019 are:
- An increase in buying from investors looking to counteract stock volatility;
- Strong performance of gold mining companies;
- Concern about the Federal Reserve’s rate hikes slowing economic growth.
According to Quincy Crosby, chief market strategist at Prudential Financial, “the market is questioning whether the [Fed] is making a policy mistake, and that could not only lead to slower growth, but perhaps to a recession.” She further stated that the nervousness in equities is “indicative of fear” which favors gold. That’s why, according to Forbes, right now is “a good time to increase your exposure to the gold market.” We agree wholeheartedly.
Click Here to read the Forbes article…