As of today, the major stock indices are close to highs. It must be time to celebrate and buy more for the breakout levels, right? I would disagree. The higher these markets go, the worse the reward to risk ratio gets for investors. I'd be selling into these rallies but I would not suggest to short sell it because there are ways to manipulate the markets upwards as it has been already in my opinion. The earnings for the majority of the stock market has been declining for about a year-two, but stocks have been rising, does that make any sense? The only reason for the prices of these stocks to continue going up is because of the companies buying back stock. These causes the Earnings Per Share to look attractive evening though the actual earnings are decreasing. If earnings are decreasing, they can only continue buying back shares for a limited time which.
Global economies are currently showing weakness, and this is dangerous for investors. China is still in a rut and the U.S looks like it could be following. Europe has negative rates and is printing like crazy to fight deflation. This will be what the U.S will most likely do as well if we start seeing deflationary symptoms pop up again. This is a reason why gold should be a strong buy, the fundamentals for gold are strong, and it would appear an uptrend has start in the gold market. There has been a shift with money flowing into the gold sectors at a very fast pace. Look at the mining shares, all mine have gone up 100-300 percent, and thats from me buying when i noticed the trends were starting. Right now, gold is having a pull back, which is why I am making this blog, to hopefully convince people to decide to get into gold/silver and possibly mining shares as well. Gold is a currency, while mining shares are an investment, and have more risk but even more reward.
If global economies are weakening, we can expect oil to go down lower. Oil is currently at 50, and it can go up still, but I believe this rally is fake. They have shipping large amounts of oil to china to be stored, which takes the concern away from U.S storages being almost full. If U.S storages were to be completely full, imagine how fast the price of oil would drop. Oil is being produced faster then consumed, and thats what spells disaster for the oil prices. This trend has to change before oil can make a bottom. The dollar could get weaker though preventing oil from breaking its low around the 26.50 range. If the dollar gets weaker though, it would create a higher gold price. If you look at gold and the dollar, you can see how one goes up and the other goes down. My thoughts are its more profitable to short the dollar by buying gold then to short oil, and most likely a lot safer. Oil is something I will be investing in when I notice the trends changing for supply and demand.
Real estate value could decline, and most likely will, but this will be a buying opportunity for anyone who is a POSITIVE cash flow investor. Chances are any strong deflation in the economy will be tackled with inflation from helicopter money. I would not buy and hold to flip. My suggestions for anyone who is in mutual funds should sell right away, the risk to reward is terrible. I would also consider holding cash for upcoming opportunities, but Id keep a good position in gold to profit. U.S treasury bonds will most likely go up as a rush of money flies to what people believe is a safe haven, but I would not trust this investment long term. I hope you all take action to profit and be in a position to acquire any opportunities that come up in the future years. We could be seeing something similar to the great depression, but we will see currencies destroyed trying to fight this if this happens, and this is what I believe will be the big crash, and these are my opinions of what asset classes will do.
Heres what could be coming
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