3 - Minute Read

Is a booming stock market always a good sign?

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Photo credit: DNY59 via iStock

The stock market is booming. That means the economy is healthy, right?   Not necessarily! It’s not always a good sign when stocks are high. They can be high for the wrong reasons. In fact, inflated stock prices can be downright toxic. Look what the Venezuelan Stock Marketdid during their crisis.   Would you have invested in Venezuela in 2017? Why not? Stocks were going gangbusters! Up 600%! WOW. The best performing stock market in the world at the time, in nominal terms.   Nominal terms. There’s the rub.   Venezuelanstrocks You need to take into account inflation, and Venezuela was steeped in a hyperinflationary cycle. Even 600% returns were not beating inflation. Government figures estimated inflation to have been “only” 127% in 2017 – laughable. The IMF estimated it to be more like 40,000%.  By 2018 it was 1,000,000%. 10,000,000% in 2019. Do you still like your 600% returns?   Stock markets can boom for all the wrong reasons, and the highs come before the falls. Not only that, but are official inflation figures even honest? Do they reflect reality? Is there any underlying fundamental value there? Sometimes you’re better off giving up 600% “returns” in exchange for something tangible, that retains purchasing power. That can’t be devalued by government caprice.  Precious Metals are a critical part of the savvy investor’s portfolio in these uncertain times.  But we don’t think gold is just going to sit there and retain value. We believe it is only going up.   Plunge Protection Program  We’re so confident the price of gold is going UP that if we’re wrong, we’ll reprice your metals and send you more gold or silver to make up the difference! Ask your account executive for details. 

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*Views and opinions expressed are those of the authors they are meant for general informational purposes only, and should not be construed or interpreted as a recommendation or solicitation. Reagan Gold Group does not provide investment tax, legal financial planning, estate, planning, or any other personal finance advice. Reagan Gold Group holds no liability for the accuracy, or timeliness of the information provided.

**Note – The Reagan Gold Group is not affiliated with the Reagan Library or the Reagan Foundation in any way. We’re just fans of Ronald Reagan and what he did for American gold ownership as president.

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