With the Fed printing lots of cash, rising inflation is a possibility. If that is the case, gold will to do well. On Top of that, gold has proven its reputation as a good investment throughout these past few months, it is up 16% YTD.
While stocks absolutely plunged in response to the shutdowns around the nation, gold stepped back marked a bottom and has since rallied on to recent highs.
An analysts that I read narrowed it down to the best case, worst case scenarios as follows:
BEST CASE: “A short, sharp recession followed by a slow recovery that takes the economy back to normal in late 2021.” In the interim, he expects bankruptcies for households, small businesses on up the chain to large corporations.
WORST CASE: “The economy remains shut for longer than expected. A hard recession lingers through 2020.”
The “best case” could lead to conservative buying habits and push gold’s price up.
The “worst case” could put “blood in the water” for the US, and worsen geopolitical tensions with China and other countries. In that scenario, gold would likely perform even better as a hedge against uncertainty.
Risk, Allocation, and Diversification are words you may have read by now. Before things get much worse, now is the time to explore how these apply to your own savings.
Also consider physical assets like gold and silver, which have been doing well lately. They can provide peace of mind by helping to reduce risk while acting as a store of real value. And they are money!
Have a healthy weekend, Keep the Faith!