The big stock market news, of course, is the volatility plaguing it. However, the bigger stock market news may be precious metals’ performance during the recent upheaval.
Although the market’s weakness began to reveal itself clearly to investors last February, the real trouble set in during the 4th quarter of 2018. Despite the choppiness early in the year, the S&P 500 still managed to go up 8% during the first three quarters.
It was over October, November and December that the roof caved in, with the index dropping 14% in those final three months of the year.
Fortunately, as the sky was falling on the stock market, gold and silver moved significantly higher and precious metals proved their value once again:
Gold vs. Silver vs. S&P 500, Q4 2018
(Courtesy of StockCharts.com)
It was another solid performance by precious metals – not the first time gold and silver have performed well during market downswings. Considering this, it’s difficult to believe so many remain averse to using precious metals to help not only keep portfolios safe but keep them growing when the environment turns unfavorable for equities.
It’s worth noting, however, not everyone in the realm of professional investing is disinclined to putting metals to work. As a matter of fact, the biggest asset manager in the world not only recently declared its love for gold but said so in terms that should resonate with all investors interested in doing what they can to make their path to retirement prosperity as trouble-free as possible.
BlackRock: Gold Is “a Valuable Portfolio Hedge”
BlackRock, Inc., with about $6 trillion in assets under management, is basically the reigning king of money management. With apologies to Warren Buffett, it is effectively the world’s largest investor. And, to paraphrase the old E.F. Hutton TV commercials, when the world’s largest investor talks, you should listen.
In a Bloomberg article, BlackRock recently spoke in glowing terms about gold investment. The company expressed a view of the metal that, in my opinion, should be shared by all who want to ensure the best results from their efforts at achieving retirement security.
Among other things, BlackRock portfolio manager Russ Koesterich had this to say about the yellow metal: “We’re constructive on gold. We think it’s going to be a valuable portfolio hedge. We’re multi-asset investors: we think about its effect on the entire portfolio, and what we see value in right now is gold’s value as a diversifier.”
One of the problems financial advisors (and by extension their clients) have is an unwillingness to remain agnostic when it comes to portfolio management. That is, there is a tendency to not see themselves as “multi-asset investors,” and remain entirely devoted to stocks, come what may.
World’s Largest Private and Public Financial Institutions Stocking Up on Gold
Many of the most successful long-term investors are likely to be individuals who remain devoid of asset biases. They are the ones who likely will seek to be in the right assets at the right times. For investors who maintain gold as a core position, this can mean increasing its weighting in their portfolios when the economic climate changes and gold appears to have a stronger upside in the near term.
The world’s largest asset manager gets it. So do central banks around the world, which have been buying gold lately at a rate we haven’t seen for years. In other words, despite all of the historical naysaying about gold throughout the traditional investment community, many of the biggest institutions (with the most to lose) know to put their trust in gold when economic conditions are deteriorating.
If you’ve been thinking of adding gold to your portfolio – just as BlackRock is doing – you might not want to wait much longer. With gold, you could be ready for the next stock market downswing.
To get straightforward answers on buying gold or silver, call Augusta Precious Metals at 855-242-4121 and speak with one of our knowledgeable team members. You can even find out how to buy physical gold and silver inside of a tax-advantaged IRA, something you likely can’t do in your present IRA or 401(k).