The stock market’s extreme volatility shows no signs of dissipating. The up-down, up-down action is gut-wrenching, to say the least.
High inflation… the continuing effects of the COVID-19 pandemic… rising interest rates…
And we can’t forget the ongoing war in Ukraine.
This week’s bout of volatility was triggered by none other than the Federal Reserve. Wall Street was a bundle of nerves ahead of Wednesday’s Federal Reserve Open Market Committee (FOMC) statement.
In yesterday’s FOMC statement, Fed Chair Jerome Powell announced the central bank was raising rates by 75-basis points.
The Fed also telegraphed two more 75-basis-point rate increases. So, by the end of September, we’re going be at 3% Federal Funds rate.
A 75-basis-point rate increase was what Wall Street wanted, and stocks soared on the news… However, sentiment turned sour today – triggering another massive selloff – as investors began to worry about the rising risk of recession. The fact of the matter is Wall Street is wondering if the Fed can engineer a “soft landing” and curb inflation without tipping the U.S. into a recession. While the Fed believes a recession can be avoided, the Atlanta Fed and Commerce Department both expect a significant slowdown in GDP growth. Two negative GDP growth quarters signals a recession.
I’ll talk more in-depth about the Fed’s latest actions and how they could impact the economy in tomorrow’s Market360 article, but I’ll say now that the Fed is stuck between a rock and a hard place.
Now, I know the wild gyrations are enough to make any investor want to admit defeat.
But that would be a terrible idea…
See the fact is, there are ways to make money in any market… even in one as boggling as 2022 has been.
In all my services, that’s meant joining the “flight to quality.”
By quality, I mean stocks with accelerating earnings and sales momentum that should climb higher regardless of where the market turns next. Institutional and individual investors alike are starting to wake up, and money is fleeing the FAANG (Facebook/Meta (META), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Google/Alphabet (GOOG)) stocks, which have taken the brunt of the selling pressure this year.
All this money is looking for new places to invest, and it’s finding its way into stocks that post strong quarterly results and provide positive outlooks for the coming year.
But that’s not the only place all that money is going… and it’s not the only way to make money in a market like this one.
The prices of one asset in particular – gold – tend to do especially well during times of economic crisis and when there is a lack of confidence in central banks. And right now, folks’ confidence is wavering, especially in central banks that have maintained negative interest rate policies like the Bank of Japan (BOJ) and the European Central Bank (ECB).
I’ve only very rarely recommended gold during my long career as an investment analyst… but now is one of those times.
In today’s Market360, I’m going to share why… and how you can gain access to my No. 1 way to grab your share of the gold market.
The Asset That Outperforms When Times Are Tough
Gold has been considered “money” for more than 2,000 years. It’s divisible, doesn’t rust or crumble, can be transported fairly easily and — maybe most importantly — can’t be created by governments.
Because of this, during times of high inflation you’ll see investors flock to gold. The fact is that gold provides stability when the value of fiat currency is declining.
Therefore, investing a portion of your wealth into gold will help harden your portfolio against turbulent markets.
And it’s not just in times of inflation investors jump into gold. When crisis hits… when wars break out… when bank runs grip a nation… when it’s really time to just “grab the money and run,” people keep coming back to gold.
That’s why, during uncertain times, you’ll see gold prices soar.
For example, in 2007, stocks began to decline in advance of the Great Recession. As the crisis began to take hold, stocks fell throughout 2007, 2008, and 2009. The broad market fell 51.7% from its 2007 high to its 2009 low.
During that terrible period for stocks, gold gained 27.8%.
You may have seen headlines that gold is trading back near $1,830 per ounce, as it’s been an attractive buy for folks seeking safe havens amid the global economic chaos.
In turn, more and more investors have sought out gold investments, which have driven gold prices back toward the $2,000+ per-ounce highs of 2020.
If you want to join this move upward, you can invest in gold by buying the physical metal. There are even companies that facilitate the purchase and store it for you. But buying and storing physical gold isn’t for everyone.
Another way to get exposure to the gold market is by investing in a gold exchange-traded fund (ETF) or publicly held gold mining companies. (Just be aware that gold miner stocks can experience the same volatility as the stock market as a whole.)
But personally, I don’t think the way to protect your wealth is by investing in physical gold or an ETF or a random mining stock.
Instead, you need to buy companies that are leveraged in gold – the same way I recommended companies that are leveraged to the price of oil.
That way you maximize profit.
My No. 1 Gold Play
My team has isolated one such opportunity. It’s an almost 100-year-old mining company that’s benefited from the recent surge in gold prices.
The company plans to boost its gold production and expects to continue to reward shareholders with quarterly dividends.
Strong fundamentals and a foothold in gold and other inflation safe-haven commodities make this company a great addition to a strategic portfolio that will survive these turbulent times.
I provide the details of this gold company in a new special report – The Best Gold Play for the New American Age – I released to my Growth Investor readers.
I’ve also found five energy stocks that are great buys right now. If you’re interested in the names, sign up for Growth Investor today. Once you do, I’ll send you my brand-new special report 5 Stocks for the New Oil Age, which details the five best energy plays. You’ll also receive my best gold play report I mentioned AND two other special reports – 3 Income Opportunities for the New American Age and 10 Stocks to Sell in the New American Age.
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Facebook/Meta (META), Amazon (AMZN), Google/Alphabet (GOOG)