Financial Opportunity of a Lifetime

28 Oct 2023

Financial Opportunity of a Lifetime

Meagan Schneider

Financial opportunity of a lifetime

The 4th quarter of 2023 is shaping up to be noteworthy if not game-changing for American wealth.

If you did not see it one of Wall Street’s most adored bond investors, Mohamed El-Erian who was the CEO of trillion-dollar asset manager PIMCO recently made comments that would have been unthinkable a decade ago.

Erian admitted the U.S. treasury bond and the dollar are losing their strategic importance to the world for the first time since WWII because of America’s runaway debt and policy mismanagement.

This is a put-your-pencil down comment to reflect on as it has massive implications for Americans. Erian is admitting the bedrock premise of America’s army of CFAs & advisors, that the dollar and US debt are the “risk-free” asset of safety - is simply wrong.

Erian has not admitted that investors should seek safety in gold yet but at least Wall Street is beginning to realize its “risk-free” asset, government debt, is a train-wreck in the making. Numerous other market observers also acknowledged the markets are telling us something is fundamentally wrong with how bonds are trading.

Yet at this time what percentage of American wealth is in money markets, T-bills, CDs, bonds, and dollar-based life insurance?

These paper assets that Janet Yellen and our politicians champion dominate American wealth.

In contrast what percentage of American investors assets are in gold and silver that our sage founders championed and ingrained into the US Constitution to protect families?

It should be striking to you which percent of your assets are aligned with the architects of our republic vs. today’s politicians.

We received yet another major real-time update on the importance of choosing asset allocations this week. The world's oldest central bank, the Swedish Riksbank, requested a $7 billion bailout due to losses from its “safe” investments in the bond markets which are suffering their worst selloff in over forty years. If an entity steps up to rescue the Riksbank, this would be the largest central bank bailout in history representing almost 1% of Swedish GDP. Think about that - 1% of GDP just to temporarily cover for the investment mistakes of central bankers.

Barely six months has passed since the Fed was forced to inject $150 billion to support collapsing banks across America and we now see even larger losses metastasizing. Expect this to be the first bank of many to begin admitting they are insolvent – a technical term that means a bank simply can’t give its customers their money back because the bank has lost customer funds with its investment mistakes.

Bonds were not the only assets sold off by markets this week as the unthinkable also unfolded in the stock market. The seven largest cap tech stocks that have singlehandedly propped up equity market averages and have been labeled “never sell” assets, have lost their near invincible reputation especially with younger investors who have yet to experience a major bear market. This week the parent companies of Facebook and Google reported earnings and joined the chorus of management teams issuing disappointing guidance. With stocks that were priced for perfection both names sold off and now Apple is the lone darling standing. It would be fitting if Apple, the most iconic tech name of this generation was the last name to admit the cycle had turned. With reports from Asia that new iPhones are being deeply discounted because demand is so weak, the stock may be vulnerable given its valuation which is very rich for a company that has not shown any earnings growth.

Remarkably despite all of these telltale signs, Americans still don’t see a need for gold as it constitutes less than 1% of the nation’s allocations.

While the primary reason to own gold is defensive, that is to protect wealth that you have already earned, ironically we believe gold has dramatic upside from these here too.

We strongly encourage you to consider that markets are at today’s valuations today solely because the Federal Reserve injected $10 trillion to artificially and temporarily elevate bond prices which has artificially elevated stock and real estate prices too. As we saw in 2000 and 2008, markets that are artificially elevated by stimulus eventually correct hard. Being positioned for such corrections post-bubble markets is one of the most important investment opportunities of a lifetime.

Especially if you are later in your career and more protective of the wealth you have earned, this environment calls for material gold allocations.

It's our duty to be good stewards of our wealth and now is the time to ensure you're protected. Instead of being devastated during periods of intense market turbulence, portfolios crafted with gold allocations have consistently shown more resilience, enabling investors to take advantage of the opportunities present after-market stress rather than needing to dig out from positions of weakness.

Call our wealth specialists at 610.326.2000, request an appointment online, or purchase online today!

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