Does Financial History Repeat Itself?

Does Financial History Repeat Itself?History may not repeat itself. According to at least one source (some think Mark Twain), it does at least rhyme. Even if you don’t believe in the mystical forces of history, you’d be foolish to ignore the patterns and signals of financial markets, particularly the ones now staring investors in the face. By heeding them, you could very well enlarge or annihilate a significant portion of your nest egg in the next several months.
According to a February 6, 2017 article in CNBC’s TradingNation by Rebecca Ungarino, gold and bonds are sending a joint signal much like the ones they sent in anticipation of the market crashes in 1987 and 1973.
When gold and bonds rise simultaneously, claims Ungarino, it’s time for a bull stock market to crash. Because investors buying gold and bonds at this point are getting ready for a big market reversal.
The reasoning here is spelled out in a newly released report from analyst Michael Harnett and his colleagues at Bank America Merrill Lynch. When interest rates and gold rise in tandem, it’s a sign of rising inflation. The Federal Reserve invariably follows up with a hike in interest rates – a clear sign of a weakening economy. Harnett points out that, since the election, there’s been a marked increase in expectation of inflation. As the bull market in stocks persists, so does the fear of reversal.
The Dow Jones Industrial Average has now surpassed the 20,000 market, and the S&P is flirting with a record number. To some, these developments are encouraging. To others, they’re troublesome. After all, how far can you stretch a band? How high is up?
If the economy does encounter inflation along the way, business could slow down for lack of ability to invest and grow. If this happens, the stock market is destined to turn around.
The stock market crashes of 1973-1974 and 1987 were both preceded by three consecutive quarters of rising bond yields along with higher bond yields. This combination revealed investors’ desire for enhanced financial protection against a market about to turn around. And right now, bond yields are continuing to rise while money pours into gold.
Doesn’t it make sense, then, to sequester at least some of your retirement funds in physical gold? You’ll be buying into the yellow metal just before the stock market plummets – excellent timing if you’re looking to hedge your portfolio.
For more information request a FREE KIT or call 800-777-6177 now, and ask to speak to a Fortress Gold Group representative.

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