This article was contributed by Tom Beck of Portfolio Wealth Global.
I’m going to show you the MOST AMAZING chart I’ve ever seen. Since 1971, the moment when FIAT CURRENCIES were born again, gold and the CRB (which is the basket of commodities) have moved in tandem until 2008, when the 37yr correlation ENDED.
The chart is so clear on this matter. It was when the Great Recession began and the central banks birthed the new monetary reality we all live in that gold and other commodities SEPARATED WIDELY.
Look at the UNBELIEVABLE CHART below, since it points to the greatest opportunity in trading distressed assets the world has ever seen.
The more I look at it, the more THE POTENTIAL of it begins to talk to me:
The disappearance of inflation in EVERYDAY ITEMS, and its concentration within certain asset classes – among them stocks, real estate, and bonds – have left commodities FOR DEAD.
In March, April and May, we’d published two watch lists, containing just over 30 companies that are mostly S&P 500 components, coupled with proposed limit orders. This was THE FIRST, later came THE SECOND. The gains have been DOUBLE-DIGITS with any and all companies that dipped below the limit orders – a RARE ACHIEVEMENT. Between the 60% in SWK, 54% in LEG, and 52.4% with PNR, there have been IMPRESSIVE WINNERS.
With the S&P 500 delivering its BEST 100-DAY rally of all time, the MAIN SECRET was to stay in there and to even CAPITALIZE on the panic.
As you’ll see below, though it seems COUNTERINTUITIVE, the stock market, with very few exceptions, MARCHES UPWARDS after such times, with a 94.4% probability of seeing an average of a 9.4% return.
Those are pretty good odds, I’d say.
There’s a GREAT TRUTH to be learned by what’s happening here; history is a GREAT TEACHER and it is telling you big moves are ACTUALLY CATALYSTS for additional rallies.
With everything that 2020 has handed us, I want to deliver a message to you.
These are very difficult times for so many people. In the western world, there have been VERY FEW HARDSHIPS the scope of Covid-19.
All over the world, there is suffering. We all want to help and contribute; some have the financial means to do it, while others do not.
We all have personalities, though. We all, poor or rich, young or old, male or female, have a personality. It is our BUSINESS CARD, the way we speak to the world. Though one might be poor, financially speaking, a wealthy character can take you anywhere!
Resist the temptations that come with this competitive world and accentuate your generosity, your gratitude, your will to be courteous, your empathy, and your patience towards everyone else, no matter what their belief system may be. Strive to be tolerant and to celebrate the truth, not your own opinions.
We have one planet and we can do SO MUCH BETTER with it.
Thank you Tom Beck for sharing your perspective. I concede that precious metals are also a commodity, but I see them primarily as a hedge against the devaluation of the DOLLAR.
From a stock-market-centric perspective the precious metals are necessarily commodities. As a hedge against devaluation of the DOLLAR, they are wealth protection.
In 1849 a one-ounce-gold-coin bought a high quality mans suit & was worth twenty DOLLARS. Today that same one-ounce-gold-coin is worth in excess of two thousand DOLLARS. The attached site displays the enormous quantities of DOLLARS tossed around like candy by congress-critters.