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Money Managers Dump Stocks Start Looking To Gold

Money Managers Dump Stocks Start Looking To Gold

Mar 29, 2020

Posted by LCR Coin

Los Angeles CA, September 11 (LCR Coin Inc.) Investors are leaving stock funds in droves, and because U.S. Treasury yields are still low, gold is looking better than ever as an alternative investment. Who would have expected gold to look so good in a rising interest rate environment? Investors have pulled out of more than $30 billion in U.S. stock funds in just 10 weeks according to Bank of America Merrill Lynch. It has been the longest run of withdrawals in more than a decade. But it's not the little guys that are withdrawing funds, it's the money managers and hedge funds. Bear markets in stocks can be brutal, the most recent bear market stretched from late 2007 to early 2009 and dropped 57 percent. Weaker-than-expected inflation rates and uncertainty surrounding the new administration has done a number on the U.S. dollar. The greenback appears to be in free-fall, since tumbling more than 11 percent after hitting a high of 104 last December. Since gold typically moves in the opposite direction of the greenback, the dollar's weakness has proven to be a green light for gold investors. “Gold provides diversification. Its returns usually come when the stock market pulls back," says the World Gold Council’s director of investment research, Juan Carlos Artigas. "That benefits investors greatly because when they feel pressure from stock exposure, their gold allocation does well,” said Artigas. Gold has outperformed many stocks this year amid increased geopolitical tensions, he adds. Meanwhile, Jim Rickards of "The Daily Reckoning" says the stock market is in a subcritical state, and the signs are everywhere. Those signs are elevated price-to-earnings (P/E) ratios, complacency, and seasonality — crashes have a habit of happening around this time of year, says Rickards. In fact, we have entered an historically volatile time of year for the stock market. The most devastating stock market crashes of all time have typically occurred in either September or October. Here are a few of the scenarios in which we find ourselves today. Each day, war with North Korea seems like a distinct possibility, while the dysfunction in Washington, DC continues to worsen. President Trump may have averted a crisis this month by aligning with the Democrats on the debt ceiling, but it's only a temporary reprieve. We will be in this exact position in three months when we will revisit the debt limit debate, and the possible shutdown of the government. Social unrest is spreading and filling the headlines each day and whether you believe in climate change or not, hurricanes seem to be happening more frequently and they appear stronger. The bottom line is, it's been nine years since the last financial crisis so one shouldn't be surprised if we find ourselves in the middle of another one very soon. Now is the perfect time to prepare for the unexpected by diversifying your portfolio and increasing your exposure to gold from 10 to 15 percent. It's American Gold and Silver Eagle coins that we most recommend at LCR Coin Inc. These Gold and Silver coins have a layer of privacy most other bullion products do not have. Plus, there are no reporting requirements by the buyer when they are sold. So when you're ready to join the savvy investors who leverage tangible assets to both increase and preserve their wealth call LCR Coin at (800) 830-5578.