Time for Gold stocks
posted on
Feb 04, 2016 05:22PM
Time for Gold Stocks |
By Briton Ryle | Wednesday, February 3, 2016 |
I'm not a gold perma-bull. I don't consistently say that you have to own gold to offset the inevitable destruction of paper currency as central banks flood the world with more and more money. If that were really the story for gold, the last five years should have been the most amazing moneymaking years for gold in history! But of course, gold prices have done nothing but fall for the last five years... even as central banks have completely abandoned sane monetary policy. Why is that? And don't say that it's some kind of conspiracy. It's not. The simple fact is that stocks nearly always do a better job of protecting and growing your wealth than gold because corporate earnings and dividend growth pretty much always outpace inflation. Of course, beating inflation over the last few years has been pretty easy, as inflation runs well below average. That's a key point. Remember back in 2009 and 2010, investors were anticipating that wing-nut central bank actions would spark inflation... The Fed was adamant that it could get inflation moving again with quantitative easing and zero interest rates. Investors figured the Fed would screw it up and we'd end up with Zimbabwe-style hyperinflation... but that's not what happened. Inflation remained stagnant, the stock market took off, and gold endured a four-year bear market. But things change, and if you don't change with them, well, you won't make as much money. Things have changed for gold. It's time to own it again. And I want to give you a couple ways to profit on what could be a 20%–30% rally for gold prices in the coming months. |