Stocks Sink Worldwide As Safe Havens RallyJohnathan Douglas
Stock markets have been on pins and needles the past several days as more and more bad news continues to leak out of the White House. From allegations of passing intelligence to the Russian Foreign Minister, to the ongoing search for a new FBI director, to reports of a major shakeup of senior White House staff, news reports coming out of Washington nowadays almost read more like soap operas than news.
The important thing to remember is that the truth of all these news reports isn’t the most important thing to markets. Markets will react to “fake news” just as much as they do to real news. They act just as much on perception as they do on reality. If investors begin to think that things are going wrong in the White House, they will act accordingly. And the perception now is that the White House is in turmoil.
With many top Administration positions remaining unfilled, legislative setbacks in Congress, and now a special counsel being appointed to look into allegations of the Trump campaign’s dealings with Russians, the first few months of this Presidency have been tumultuous.
Stocks Markets Are Taking a Tumble
It’s no wonder then that stock markets are beginning to panic. The famous “Trump Bump” was seen as a reaction on the part of markets to the likelihood of President Trump enacting business-friendly policies like lower corporate taxes, decreased regulation, and better trade deals. The perception was that President Trump would use his deal-making abilities to force business-friendly legislation through Congress. Stock markets began to boom, thinking that good times were just around the corner.
The reality is that governing isn’t quite as easy as anyone thinks it is, and President Trump is learning that the hard way. Having to work with his senior staff, his Cabinet, and 535 people in Congress is a tall task. And so President Trump’s agenda has gotten bogged down.
Markets are no longer certain of quick passage of pro-business legislation and they’re getting nervous about the health of the economy. Job and wage growth are slowing, retail stores are going the way of the dodo, and household debt just increased to levels that haven’t been seen since the last financial crisis. As more and more economic data comes in that shows a weakening economy, the longer it takes President Trump to enact his agenda, the worse stock markets will react.
Gold and Silver Prices Rising
But while stocks and bonds have lost their luster, gold and silver are glittering as brightly as they ever have. Gold prices jumped by over $50 at one point this week as investors sought a safe haven, and silver prices were up over 4% on the week. It’s no surprise that when economic and political news is bad, investors flock to gold and silver. Precious metals are the ultimate safe haven and have been for centuries. When investors lose faith in stocks and bonds, they look to invest in gold and silver.
Safe haven buying of gold and silver will continue to increase in the future. With the likelihood of another financial crisis in the future, gold and silver will continue the strong gains they have seen this week. Those who made the smart move by investing in gold and silver today will reap the rewards in the months and years to come. Gold and silver always keep their value during good economic times, and they outperform other assets during bad economic times.
One of the easiest ways to invest in gold and silver is through a gold or silver IRA. A gold or silver IRA allows you to reap the benefits of gold and silver’s safe haven status while still enjoying the same tax loopholes that conventional IRAs enjoy. You can have your cake and eat it too. Holding assets in gold and silver will protect your wealth and your savings better than any other asset. Don’t wait until the next crisis comes along or until your savings start to take a hit, because then it will be too late. Invest in gold or silver today to ensure that your savings remain well-protected in any eventuality.