News By Tag
* Stock Market Advice
* Investment Advice
* Gold Advice
* Stock Market
* Investment Risk
* Sovereign Debt
* Spot Price Of Gold
* More Tags...
News By Location
Investment Risk Going Up—It’s the Kind of Market Where Anything Could Happen
The stock market is being very clear about how it feels about the current state of things—it isn’t very happy at all.
This makes the argument for having some serious exposure to gold ever more pertinent. If you’re checking, the spot price of gold has been moving higher lately and, in my view, $2,000 an ounce is an easy price target for the commodity if things go bad in Europe. Gold companies are already making money hand over fist, with gold over $1,000 an ounce. Anything over $1,300 an ounce is pure gravy.
Equity investors are still likely to migrate towards yield in this market. There just isn’t enough underlying growth in earnings for investors to expect much in the way of capital gains. Accordingly, institutional investors are looking for safer bets. And it isn’t just because the expectation for rising share prices is low; big investors are well aware of the sovereign debt problem and the potential for a cascading currency collapse in Europe. I can’t stress enough how big this problem could be for your pocketbook. Even though you might not own any euros, a currency crisis in Europe will wreak havoc on domestic stock markets. We all know how fast the stock market can crash, but, with currencies, the destabilization is much greater. It affects bonds, money markets, interest rates, and stocks. It’s an issue that’s going to be with us for a number of years.
This is why a conservative stance is warranted with an equity portfolio. The market is already expecting a solid earnings season and share prices aren’t likely to advance unless corporate visibility improves. It’s also a good argument for owning some gold, because global capital markets will continue to bid on the commodity, as there’s little growth in the global economy, there’s rising inflation, and there’s rising investment risk due to high levels of sovereign debt.
We’re actually in a state now where anything could happen to financial markets. Things could calm down in Europe and corporate earnings could impress. There just isn’t a reasonable way to figure out what’s going to happen over the coming months and that’s why extra caution for investors is necessary. There’s no need to commit new monies to equities at this time. Cash in the bank is always attractive.
Retire on This One Hot Stock!
This stock is up 232% since we first picked it. Our expert analysts say it will go up another 100% in the next 12 months! Our top 19 stock picks were up an average of 173.57% in 2010 (not a misprint). See where we are making money in 2011 and get our combined 100 years of investing experience working for you starting today.
Get your FREE report on our top stock pick immediately here.
# # #
We publish Profit Confidential daily for our customers because we believe many of those reporting today’s financial news simply don’t know what they are telling you! Reporters are trained to tell you the news—not what it can mean for you!
Visit our site: