The U.S. economy is churning out, for the most part, solid economic data and the broader markets are at record levels. In fact, many Wall Street analysts are predicting the S&P 500, which recently broke the 3,000 level for the first time, could surge past 3,200. Yet, amongst all of the bullish sentiment, two well-known hedge fund giants, Ray Dalio and Paul Tudor Jones, are telling investors to add gold to their portfolio. Precious metals like gold and silver are viewed as a hedge against economic uncertainty, as is bitcoin, the most heavily traded cryptocurrency. Despite a strong stock market and U.S. economy, should investors start to look at gold, silver, and bitcoin?
Hedge Fund Heavy Weights Say to Buy Gold as Markets Shift
Billionaire investor Ray Dalio, is the founder of Bridgewater Associates, the largest hedge fund in the world, worth $150 billion. Dalio believes there is going to be a paradigm shift in investing, which will make a case for adding gold to your portfolio.1
Billionaire investor Paul Tudor Jones, founder of the Tudor Investment Corporation, meanwhile said that gold is his favourite trade over the next two years.2
The stock market is at record levels, investors are increasingly bullish, and the Volatility Index, continues to show that investors are not worried about where stocks are heading. So why, in the midst of all this positive news, are two of the world’s most successful traders, telling investors to invest in gold?
Do Dalio and Jones have a point? Yes. Artificially low interest rates coupled with quantitative easing (central-bank money printing), has sent income-starved investors running to the stock market. This has, in turn, sent stock’s soaring and valuations through the roof. This comes at a time when earnings projections are way down.
This is a trend that cannot continue indefinitely. As a result, many investors are going to be faced with diminishing and even negative returns.
Moreover, a dovish Federal Reserve—which looks like it’s going to actually cut its key lending rate—trade wars, and growing geopolitical tensions are another reason to consider looking at gold bullion, silver, and gold and silver stocks.
For some investors, bitcoin and other cryptocurrencies will also find a place in their portfolio. Bitcoin, which was born following the 2008 Great Recession and collapse of the stock market and housing market, is also cited as a hedge against economic and geopolitical uncertainty.
Bitcoin and other cryptocurrencies have a finite supply, are decentralized, and are not handicapped by central banks. As a result, a weakened global economy or stock market correction, or even another crash, could see alternative currencies like bitcoin, soar.
Learn-To-Trade.com, Canada’s Leader in Stock Market Trading Courses
Equities are at record levels and investors are upbeat. Despite the glowing optimism on Bay Street and Wall Street, cracks are beginning to appear. The trading professionals at Learn-To-Trade.com understand that while no one can predict when the markets are going to turn, it makes sense for investors to protect their capital by looking at alternative assets and stores of value, like gold, silver, and bitcoin.
As Canada’s oldest and leading provider of stock market trading courses, Learn-To-Trade.com has taught thousands of investors, of every skill level, how to trade more confidently and profit more consistently. No matter what the broader markets are doing.
Our instructor’s will show you how to conduct a technical and fundamental analysis, read economic cycles, and spot market trends. You’ll also learn about bitcoin and other cryptocurrencies, forex trading, foreign markets, commodities & futures trading, and stock index trading. We’ll also teach you about risk management and capital preservation.
At Learn-To-Trade.com, we understand that investors have different needs, that’s why we provide a unique, Lifetime Membership that allows you to re-attend any part of the program as often as you’d like.
To learn more about Learn-To-Trade.com’s stock market trading course, contact us at 416-510-5560 or by e-mail at info@learn-to-trade.com.
Sources:
- Dalio, R. “Paradigm Shifts,” Ray Dalio, LinkedIn, July 17, 2019; https://www.linkedin.com/pulse/paradigm-shifts-ray-dalio/.
- “Gold Is Paul Tudor Jones’s Favorite Trade for Next 12-24 Months,” Bloomberg, June 12, 2019; https://www.bloomberg.com/news/videos/2019-06-12/gold-is-paul-tudor-jones-s-favorite-trade-for-next-12-24-months-video.
Photo credit: iStock.com/fergregory
