How would you invest money you didn’t need for ten years?

IMG Auteur
Published : July 27th, 2016
728 words - Reading time : 1 - 2 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Today's Editorial

One in six choose gold in Bankrate survey

SPECIAL REPORT
by Michael J. Kosares/USAGOLD

One in six investors chose gold as the best place to park money they wouldn’t need for more than ten years – the same number that chose stocks, according to a recent Bankrate survey. Another 6% chose bonds, while 25% chose real estate, and 23% said they would simply bank the money.

bankratesurvey2016Data source: Bankrate/Claes Bell

To the typical Wall Streeter, these results represent a world turned upside down. CNBC’s Jim Cramer took one look and lamented, “As someone who has lived and breathed stocks for most of my life, this is a horrendous finding. But it’s not surprising.”

In a recent Financial Times column titled appropriately, Brexit and the power of wishful thinking, Tim Hartford, the Underground Economist, sheds some light on the psychological transformation now taking place among investors:

“Perhaps the most important lesson is that we spend too much energy trying to foretell the future, and too little trying to be resilient whatever happens. . . Because scenarios are persuasive stories, they can help us face up to uncomfortable prospects and think clearly about possibilities we would rather ignore. And because scenarios contradict each other, they force us to acknowledge that, in the end, we cannot actually see into the future. As a result we move from ‘What will happen?’ to ‘What will we do if it does?'”

To become “resilient whatever happens” requires acting before, not after, the next financial crisis headlines the evening news. Many now reject the old financial religion that diversification amounts to the proper blend of stocks and bonds and little else. That formulation was acceptable when the money was sound and the federal government had not buried itself under a $19 trillion pile of debt. It held sway when confidence was running high and considerably more of the population than 17% were satisfied with the direction of the country (a polling number recently reported by Gallup). Now investors are looking to add safety and liquidity to their portfolios to augment the pursuit of capital gain, and, as the Bankrate survey shows, are now turning to the preeminent safe haven – precious metals.

Even Willem Buiter, chief economist for Citigroup and a long-time critic of gold, now says he would own the metal. “Gold, in times of uncertainty and especially in days of uncertainty laced with negative rates, looks pretty good,” he concedes. At the same time, he sees stocks as in a bubble. He believes investors are “pinning their hopes on a long-term growth of corporate earnings which bear no relationship to underlying economic growth.”

Buiter’s change of heart is symptomatic of the trend charted below by our friends at SentimentTrader. This chart depicts the ebb and flow of sentiment towards gold. The Bankrate chart shows its cumulative effect. Note particularly that the positive change in sentiment toward gold began in the early 2000s and did not retreat below the excessive pessimism line until 2013-2015, when gold fell from its all-time highs.

Now, since January, gold sentiment has returned to positive territory mostly driven by the low-to-negative rate environment, but also because gold once again looks to be under-valued. If Buiter is correct, and I think he is, in the months ahead we might anticipate another significant flow of capital out of stocks, bonds and cash savings and into gold and silver. Jim Cramer elaborated on the Bankrate findings by saying that “successive waves of mistrust, abuse and fear have now become ingrained into the American public.”

24hGold - How would you invest...
 Chart courtesy of SentimentTrader/Jason Goepfert
__________________________________________________________________
USAGOLD’s News & Views newsletter has provided cutting-edge coverage of the gold and silver markets for over 25 years. Its content is widely quoted, re-circulated and sourced at websites all over the world. Its principal objectives have always been the same – to keep our clients informed on important developments in the gold market, condense the available gold-based news and opinion into a brief, readable digest, and, most importantly, to counter the traditional anti-gold bias in the mainstream media. That formula has won it a five-figure subscription base. This SPECIAL REPORT is published as a supplement to our regular newsletter. If you would like to receive the upcoming August issue, we invite you to sign-up at our registration page. There is no charge for the service and your participation is welcome.

Stocks-Gold

Share

 

Source : www.usagold.com
<< Previous article
Rate : Average note :0 (0 vote)
>> Next article
Michael J. Kosares is the founder of USAGOLD-Centennial Precious Metals, Inc., the author of "The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold", and numerous magazine and internet articles and essays. He is also writes a popular weekly Client Letter on the gold market. Mr. Kosares is frequently interviewed in the financial press and is well-known for his on-going commentary on the gold market and its economic, political and financial underpinnings. He has over 30 years experience in the gold business. USAGOLD-Centennial Precious Metals is one of the oldest and most prestigious gold firms serving private investors in the United States, Europe, Canada and Australia.
WebsiteSubscribe to his services
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Take advantage of rising gold stocks
  • Subscribe to our weekly mining market briefing.
  • Receive our research reports on junior mining companies
    with the strongest potential
  • Free service, your email is safe
  • Limited offer, register now !
Go to website.