Every month that went by in 2017, Portfolio Wealth Global kept pounding the table that emotional decisions, too bullish ones, do not reflect the fundamentals in the economy. No matter what mistakes were being made by policy-makers, industrialists and CEOs, investors kept on bidding prices higher for FAANG stocks and cryptocurrencies.
While trading the uptrend bubble is a lucrative strategy, knowing how to take chips off the table is also critical. I had a position in Apple, which I took profits on when the company became a $1 trillion operation. That number just didn’t make sense to me. In hindsight, it was great timing to get out.
This is because since that time, the markets have been hammered more than a fishing boat in the North Sea – it’s been a brutal and relentless one-way direction – DOWN – for 93% of global asset classes this year.
Courtesy: ZeroHedge.com
This is the WORST year since 1901. In 117 years, we haven’t witnessed a calendar year that ends with 93% of assets down for the year. The U.S. dollar has outperformed them all.
The last time the U.S. dollar outperformed all else was in 1969, right before the world forced the U.S. to audit its gold reserves, which Washington declined to do, so Nixon closed the “gold window” and a 2,400% rally in precious metals started.
Remember that because gold has just broke resistance, riding above its 200-DMA on the backs of government shutdown and yet another debt ceiling crisis in March 2019.
Courtesy: U.S. Global Investors
Not only has gold performed exceptionally well compared with the S&P 500, but also in, virtually, every other measure. The Dow Jones is down 16% from its highs. The S&P 500 is down 17%, the NASDAQ is in a bear market with a 22% decline, and small-cap indices are down 26%.
93% Of Investors Generate Annual Returns, Which Barely Beat Inflation.
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In 34 years, there were only 8 days where more stocks traded at 52-week lows than this past Friday.
What exactly has the Federal Reserve accomplished in 10 years? Is the average American better off and will our future generations agree with the policies implemented by the central bank, Treasury department, and high-ranking politicians when the real cost of them sinks in?
Courtesy: ZeroHedge.com
The debt liabilities of the Federal Government will face the enormous challenge of convincing lenders that bonds are still safe and worth investing in.
The bottom line for us, as investors, is that the world is coming to the realization that what we see in TV shows about the American Dream and what life in today’s U.S.A. is really like are two polar opposites.
I’ve spent months each and every year since 2008 in various regions throughout the 50 states, and a wipe-out of the middle-class is, without a doubt, noticeable to the naked eye.
This movie does not have a happy ending, as far as I can tell. America is growing richer, but it is cutting the wealth pie to fewer and fewer people every year that goes by.
Right now, all the negativity in the world is baked into asset prices, though. Low growth is also forecasted, so any positive news will change peoples’ opinions and will likely boost their confidence to start spending, thinking that the worst is behind us.
This is the reason why Portfolio Wealth Global sees inflation surprising projections in 2019.
Hard assets are about to have a great year after a meltdown this year.
Best Regards,
Tom Beck
Research Partner, PortfolioWealthGlobal.com
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.
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