With several dangers to the stock market looming, gold is once again becoming an attractive investment.
In this post, we look at some of the issues currently plaguing the stock market. We’ll also see how gold can help protect your portfolio from losses, and how to start a gold IRA (Investment Retirement Account).
Issues Investors Should Be Concerned About
One of the newest issues that could become a danger to the stock market is oil. On Thanksgiving Day, OPEC (Organization of Petroleum Exporting Countries) announced that they would not be demanding an output cut in oil to stop prices from falling. As a result, as seen in recent news, oil stocks have fallen dramatically. With lower oil and gas prices, shale production in the United States has become too expensive to continue.
Lower oil prices could be one factor leading to a global recession. This has lead to many smaller companies closing doors and several unemployed consumers. This move could be devastating to the United States stock market and financial markets around the world.
The Middle East
Unrest and recent conflict in the Middle East could be another factor resulting in market instability. Iraq, Syria, and Gaza continue to be hotspots, and the US shows no signs of getting further involved. We all know how war affects the stock market, so this is a development investors are watching closely.
As an investor, your goal is to invest when valuations are low and sell when valuations are at their peak. However, the Schiller PE ratio shows that if you’re buying stocks right now, you’re grossly overpaying. In a stable market, the Schiller PE ratio stands around 16. However, in today’s market it’s 26.5, showing stock valuations are reaching a dangerous highpoint.
How Gold Can Help
History tells us that as the stock market’s decline, or collapse, investors seek safe havens to protect themselves against further losses. Gold is one of those investments. Investors start to purchase gold during market instability, ultimately increasing demand and reducing supply. As a result, the value of gold tends to greatly increase during tough economic times and market corrections. With the current geopolitical turmoil and global economic dangers looming, choosing a Gold IRA (Investment Retirement Account) is a smart decision.
How to Start a Gold IRA
Starting a gold IRA is a fairly simple thing to do. It only takes 3 steps…
- Open An Account – Using a gold brokerage like Goldco Precious Metals, open a gold IRA account.
- Fund Your Account – Make your first deposit into the account.
- Create Your Plan – A decent broker will help you through creating a plan for retirement through the use of your new gold IRA.
Starting a gold IRA is an incredibly easy thing to do. While the stock market is up today and gains are being enjoyed, there are several dangers to the market. By hedging your investments with gold, you can put a limit to losses, or even realize gains during down market trends.