During the Cold War, when the world was lurching ever-closer to the doorstep of a nuclear holocaust, disaster preparedness was an abiding virtue of every American family.
Once the stand-off with the Soviet Union gave way to the 21st century, this high alert about potential war or crises later came to be applied to retirement portfolios and wealth management. After the global financial crisis of 2007-2008, people began to make preparations for an economic apocalypse rather than the real deal.
What has proven to be the best insurance policy against this ever-present risk? You guessed it: physical gold.
There are a number of measures that concerned citizens began to take in order to better prepare their families for the next financial calamity. There are some obvious homesteading steps that any family with sufficient means can take, such as investing a backup generator and storing an ample supply of non-perishable food and supplies.
The next pressing matter for concerned families (and individuals, for that matter) was avoiding another wipeout of their hard-earned pensions. Even the most diversified fund or portfolio is vulnerable to a severe and systemic market downturn like the one we saw during the Great Recession.
From a long-term perspective, tangible assets are seen as a safer financial foundation than risk assets like stocks, currencies, and new bespoke investment vehicles like exchange-traded funds (ETFs). However, we’ve seen real estate (a tangible asset) go into a bubble and crash before. Other commodity prices are notoriously volatile. Compared to all safe-haven assets, tangible or not, gold and silver have the most straightforward and convincing case during times of economic crisis.
This is especially true when you’re using gold to prepare for the long haul—and any of the inevitable financial crises that await. During the last recession, gold prices surged to an all-time high just shy of $2,000 per ounce that has yet to be matched to this day. Whether the problem is unexpectedly high inflation, a disruptive military conflict, or a general contraction of the inflated equity markets, the general trend in the event of one of these “Black Swan” occurrences is for investors (especially the biggest ones) to rush into the safety of gold.
The sooner you prepare, the better able you are to weather the storm when it eventually comes.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.