Will Gold and Silver Repeat Their 2008 Performance?
While the Presidential election results remain in limbo, it seems increasingly likely as time passes that President Trump might not be able to pull victory from the jaws of defeat. Whether the Biden campaign actually has the votes to win or is creating them out of thin air is something that will likely remain the subject of bitter litigation for quite some time. But in the meantime, the world continues to turn. We live our lives and make decisions as best we can. With a Biden win, however, many investors may choose to make changes to their investments in order to maximize their returns in what could end up being a very rough 2021 for markets.
The economy is facing significant headwinds, some years in the making and some the result of decisions made to lock down state economies. Now is the time that many investors need to take a good hard look at their investment and determine how they’re going to protect the gains they’ve already made and keep from taking losses in the future.
Some of the more popular assets for protecting investor wealth are precious metals, such as gold and silver. Both metals have performed tremendously this year, with gold increasing 29% and silver increasing 43%. But if history is any guide, they have much further to run.
How Gold and Silver Fare After Elections
Looking back to 2008, the last time the White House switched from Republican to Democrat, we can get a sense of how gold and silver might react. Fall 2008 was a stressful time, not least for investors. The failure of Lehman Brothers and the pressure that put on the financial system had many people worried that the financial system could completely collapse. That led to the passage of a $700 billion bank bailout, followed by what eventually would be trillions of dollars worth of quantitative easing.
Perhaps most importantly in the memories of many people, the 2008 Presidential election resulted in the White House changing from Republican to Democrat with the election of Barack Obama. He entered office in January 2009 with the economy in shambles, and with many hoping that he would right everything that had gone wrong under the Bush administration.
As it turned out, within a month of Obama taking office, Congress passed the American Recovery and Reinvestment Act, a stimulus package that cost over $800 billion. Between the bailout, the stimulus package, and QE, massive amounts of money were pushed into the financial system. But nothing seemed to help, as the effects of the collapsed housing bubble continued to weigh heavily on the economy for years.
The situation in 2008 bears many similarities to the situation today. COVID came from out of nowhere to take the world by surprise. Governments locked down, severely harming their economies. Then governments stepped in with massive amounts of fiscal and monetary stimulus to smooth over the effects of the lockdowns. And now the White House may change hands from Republican to Democrat, with no one certain what economic policy will look like in the coming months.
Many investors have already chosen to protect their assets by investing in gold and silver. Those who are still on the fence are probably wondering which way gold and silver will move. If 2008 is any guide, the next year could be a good one for precious metals investors.
The day before Election Day in 2008, gold closed at $722. By the end of election day, gold had risen to $761.10. And by the end of the year, gold had risen to $880.80, a gain of 22%.
Gold continued to rise after that, and by the anniversary of Obama’s election, gold had risen to $1,091.90, a gain of 51% over its pre-election price. In an environment in which stock markets lost over 50% between 2007 and 2009, an asset that gained over 50% naturally attracted investor interest.
Silver’s performance was similar, rising from $9.79 the day before the election to $11.32 by the end of the year, a gain of 15.6%.
From there, silver really took off, reaching $17.44 an ounce by the anniversary of Obama’s election, a gain of 78%. Not only was that a phenomenal performance, it was a reminder to investors that during bull markets, silver’s gains not infrequently can outperform those made by gold. We’re seeing that again today, as silver’s year-to-date performance is nearly 50% greater than gold’s already amazing and record-breaking performance.
Is Now the Time to Buy Gold and Silver?
For investors looking to protect their assets, the potential for gold and silver to make the same kinds of gains over the next year that they did after the 2008 election is undeniably a major draw. By investing in gold and silver, they can lock in any gains they’ve already made in stock markets and continue to make gains through their precious metals investments, even if the economy turns way south. Even better, investing in gold and silver can be easily done by rolling over or transferring existing retirement assets from 401(k), 403(b), TSP, IRA, or similar retirement accounts into a gold IRA or silver IRA, normally without any tax consequences whatsoever.
Imagine being able to invest your current retirement savings in physical gold or silver coins and bars without having to pay taxes or penalties. Imagine not having to worry about a stock market crash decimating the value of your investments, because your precious metals investments could gain 50% or more. Imagine the freedom and peace of mind that would give you.
Are you ready to take the plunge and start thinking about investing in gold and silver today? Time is of the essence, as once the economy begins to turn south, you may not have the chance to pull your assets out of stock markets before they lose value. Don’t get caught flat-footed as millions of investors were in 2008. Contact Goldco today to find out you can put gold and silver to work protecting your retirement savings.