Celebrate Pi Day with an Investment Portfolio Math Check!

Investment options today are not what they used to be. The Fed’s monetary policy activities have utterly crushed out the bond market as a viable, secure, and dependable investment vehicle. In 1981, 10-year government bond yields averaged 15.32%. By 1990, that yield had fallen to 8.89% and by 2000, it was down to 5.80%. After laying near fallow for years, the Fed initiated an urgent flurry of interest rate hikes that now has the yield up to a whopping 2.34%. How can it be the least bit surprising that a far greater portion of the investment community is making riskier investments than they should, based on their income and retirement savings. Cryptocurrencies are a good example of this newfound tendency.

Meanwhile, the market has become a whipsaw ride where survival seems to be the greatest achievement. Down seven points from its all-time closing high on January 26, 2018 this long-in-the-tooth stock market simply can’t find consistency. The fact that public companies borrowed $1.8 trillion in cheap Fed money earmarked for maintenance, infrastructure and growth is encouraging, but the fact that those same companies spent $2.1 trillion on stock buyback programs crushes any opportunity for excitement and continued growth. The news is smattered with daily political turmoil, most recently is yesterday’s firing of Secretary of State Tillerson. Global conflicts too fill the news daily, whether Syrian skirmishes or trade war discussions, there is no shortage of global discourse to deter and concern investors.

But the question remains, “What investment vehicle is best for current economic conditions?” Regardless of the stock market’s ability to facilitate continued growth, there is an investment made for these conditions, because the greater the pressure on popular investment instruments, like currencies, stocks, and mutual funds, the greater the appreciation potential for physical precious metals. The fundamental realization that needs to be grasped by investors is that gold and silver have solid industrial base prices, such that from their current positions, gold and silver reach a hard stop after a 20% loss from here. The stock market, on the other hand, regardless of a 10% correction since its recent high has a limited upside potential and a much greater propensity now for rapid loss.

The minimum 10% physical metal portfolio portion recommended by most financial advisers may simply not be enough protection in today’s economy. Russia’s defensive missile system sale to Saudi Arabia combined with China’s circumvention of the petrodollar by way of the Shanghai Energy Exchange has cleared the way for the reduction or outright replacement of the U.S. Dollar as the premier global reserve currency. The benefit of that status has been taken for granted for so long that the shock of loss will send a sobering shiver through the entire financial community as the fiat nature of our currency is exposed and the rapid devaluation of everything dollar-related begins. Call the experts at American Bullion for physical precious metal protection at (800) 653-GOLD (4653). Don’t get caught without a chair when the music stops!