Major Bank Urges Its Clients to Ditch Stocks, Buy Gold in 2016James Cordelaine
Most investors have become oblivious to this pointed warning when they buy stocks: “Past performance is no guarantee of future performance.” We can only hope these same investors become less heedless after they read a recent article in Business Insider revealing that experts at a top European bank are advising their clients to steer clear of stocks and instead buy gold in 2016.
In a research report, two technical analysts at UBS, the largest bank in Switzerland, have urged their clients to avoid stocks and jump into gold with both feet in the coming year. Their argument has everything to do with timing, and the most-proven, least-heeded advice in investing: Buy low, sell high.
As UBS analysts Michael Riesner and Marc Müller view the current investment landscape, “[W]e see gold profiting as a safe haven and as of 2017, gold could profit from the US dollar moving in a major top and starting a bear market.” Wow! Quite a departure from the conventional wisdom we’ve been subjected to, and from technical analysts at one of Europe’s longest-established banks, of all people.
The Riesner/ Müller report is anything but guesswork or a knee-jerk reaction to current market conditions. They’ve been quite insistent about their point of view since at least 2015. They’ve issued charts in this latest report which reveal a great deal of volatility. As stocks push higher, imagine some consecutive short up-and-down lines which suggest to Riesner and Müller a great deal of volatility – sputtering, if you will, just before stocks begin to top out.
With gold on the other hand, they feel similar volatility represents just the opposite phenomenon – a revving of the engine just before takeoff to ignite a new bull market.
“A potential bottom in 2016 bottom could be a rather powerful bottom, since together with a four-year cycle low we have also an eight-year cycle low projection for this year. In this context we expect a potential 2016 low in gold to be the basis of a new multi-year bull market.”
Now ask yourself, “Do I want to stay too long at the fair with paper assets? Or do I want to move the funds in my nest egg to a tangible asset skilled experts insist is both safe and notably undervalued?”
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With ongoing economic troubles in China and the serious flare-up between Saudi Arabia and Iran, we’ve already seen a one percent jump in the price of gold just days into 2016. That jump is a stark indication of where investors will run when they need a safe haven for their portfolio – and additional insurance for the moment the dollar begins to top out and the prices of stocks start to plummet. Where will you be when that happens? Let’s hope you’ll be safely ensconced in an adequate supply of physical gold.