Last year, stock prices rose to levels that are completely and utterly absurd. Considering the economy was and is still down, unemployment was at an all-time high, it was puzzling to see all these investors pouring in.
Many think that we are currently in the largest stock market bubble in the entire history of our nation. Of course, this bubble will end the way that all of our other stock market bubbles eventually ended, with the bubble bursting.
The Dow Jones Industrial Average was down 725 points. That represented the worst day for the index since October 2020. Sure, one bad day is not a crisis. Even though many individual stocks have already plunged into the bear market territory, we have a long way to go before people start using the word “crash”. In fact, I don’t think that anyone should even think of using the word “crash” until the Dow drops below 30,000.
The Delta variant is a huge factor, though. It’s a bit of an overreaction but when you have a market that’s at record highs, that’s had the kind of run we’ve had, with virtually no pullback, it becomes extremely vulnerable to any sort of bad news.
I don’t necessarily think it’s right for investors to pull back because of the variant of for any reason for that matter. I think it should be the other way around. When the market is down, when the economy is down, you should invest.
However, I am not in the market. And the market won’t always agree with me.
According to CNBC, the number of newly confirmed COVID cases per week has more than doubled over the past month…
The U.S. is averaging nearly 26,000 new cases a day in the last seven days through Sunday, up from a seven-day average of around 11,000 cases a day a month ago, according to CDC data. Cases were already flaring up around the world because of the delta variant.
Now that the market has started to fall, some experts are warning that the drop could be quite substantial.
For example, one Morgan Stanley strategist believes that we could eventually see a “correction” of 10 to 20 percent…
Morgan Stanley chief U.S. equity strategist Mike Wilson said that the market appears ready to take on a more defensive character as we experience a meaningful deceleration in earnings and economic growth.
Actually, if that is the worst that happens we will be quite fortunate.
Zero Hedge has also pointed out that Goldman Sachs has been aggressively selling off billions of dollars worth of stocks recently…
What is even more remarkable is just how much Goldman has harvested so far in 2021: as shown below, having started with a $20BN equity portfolio which has enjoyed a $5BN increase in market prices, Goldman dumped a whopping $5.5 billion of its equity assets.
This is not normal for Goldman Sachs.
In fact, you have to go all the way back to just before the financial crisis of 2008 to find another time when they did such a thing…
The last time Goldman was “aggressively” selling into a “supportive” market? We have to go back all the way to 2007 and 2008 when Goldman was busy creating the very CDOs which its prop desk would then “aggressively” short.
We all remember how prophetic that particular move turned out to be…
That is “interesting” to say the least.
Something is up.
I personally don’t want to speculate. What I like doing is preparing for the worst. I do that by making sure I have the basics right and that means diversification.
I invest in bonds, stocks, ETFs, real estate, businesses, crypto, and gold.
More importantly, I don’t panic even when things go wrong. Do you know why?
Because I invest in gold and gold is the best hedge against inflation. I invest enough to cover me in case everything else goes down.
So, if you want to know more about how gold can protect you against all economic distress, call us. Our associates will be ready to answer your questions. Don’t worry. No pressure. You can just ask your questions.
Call us at . or you can start by downloading our free gold and silver investment guide for free.
