President Trump and others have said things are going well in trade negotiations with China in spite of worrisome appearances and an all-out trade war with China is just a potential worst-case scenario. There may be a positive outcome from all of this eventually, but we believe the timeline on positive results is becoming even further extended than we may have first thought. We haven’t seen a deal yet, and the President has even further hiked tariffs. Both sides are digging in their heels, showing no sign of compromise. In our opinion, a trade war with China is now likelier than ever and retirement portfolios could be at tremendous risk. The professional financial services community is moving quickly to prepare, and investors need to practice patience and build financial resilience while we wait to see a positive result from the President’s plan. Alternative assets – such as physical precious metals – could prove an essential portfolio addition for astute investors to get a little safe-haven protection.
- Trade conflict is back. It never really went away, but now devolving trade relations between China and the U.S. are making the economic outlook especially bleak once again. Last week, President Trump more than doubled tariffs on $200 billion in goods from China – from 10% to 25% – and the move sent markets reeling. Neither side is displaying any interest in compromise, and Wall Street is now planning for the worst. A piece at ZeroHedge does a nice job summarizing analysts’ acute concerns across the risk-asset spectrum now that a meaningful trade agreement with China anytime soon seems to be circling the drain.
- Well-known investment banker and risk manager Jim Rickards says we should all be on the lookout in the next recession for banks to begin using negative interest rates – charging customers to keep money in the bank. Many experts, including Rickards, believe heretofore “extreme” monetary policy measures such as quantitative easing won’t be enough to rescue the country from the depths of economic despair next time. He believes the Federal Reserve – operating from an International Monetary Fund blueprint – will turn to negative interest rates as a heroic effort to fix things and effectively force citizens to keep their money out of banks and spend it…preferably in government securities. For more, check out The Daily Reckoning.
- There’s a growing number of predictions from serious-minded observers that equities are heading into a sort of “winter” of returns that could last as long as two decades, during which the S&P 500 could post inconsequential or even negative gains throughout. Respected business writer Brian Livingston admits expecting nothing from stocks for 20 years may be dramatic. However, he says a good look at projections for even just the next five years reveals the markets are poised for zero return. The reason? Simply put, it appears households will have practically no new money to invest in the securities markets for the foreseeable future. Refer to MarketWatch for his complete insight.
- If you have an IRA, 401(k) or other retirement plan, it’s likely invested only in stocks and/or other paper assets. Gold investment options in your current plan probably have been limited to gold mutual funds, exchange-traded funds (ETFs) and mining stocks. Mining stocks are a particular favorite of financial advisors when clients ask about diversifying into gold, especially stocks for companies famous the world over for their gold mining success. But when you invest in gold mining companies, are you really invested in gold? More importantly, are you getting the same portfolio-protection benefits you get when you invest in physical gold? The answer is no, and that could mean all the difference in the world to your eventual success at funding your retirement. To “drill down” further on this, read Augusta’s latest blog article here.
For all of the reassurances regularly dispensed about trade and the macro economy, it doesn’t seem to take much in the way of bad news to give the market fits and remind everyone just how fleeting portfolio stability can be in this climate. The good news is that there are simple steps you can take to vastly improve the chances (based on historical data) that your retirement accounts could not only survive but thrive during any periods of significant turmoil. One of those steps is to include physical gold and silver among your assets. To learn more about gold and silver ownership and silver/gold IRAs, call Augusta Precious Metals at 855-242-4121 or visit Augustapreciousmetals.com.