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An extended period of stagflation could damage not only the economy and markets but investors as well. In this post, we’ll discuss how to best protect your wealth and safely ride out this market volatility.

Let’s first take a look at some current economic news.

The Fed May Not Pivot Now

Stagflation Could Be Very Damaging For Investors

The gold market is seeing some selling on Friday as the non-farm payrolls data surprised to the upside. According to the report, the US added some 528,000 jobs in July. Consensus estimates were calling for a rise of 260,000 jobs.

The much better-than-expected jobs data may force the Fed to hold its current course and continue raising rates aggressively. The jobs data immediately sent treasury yields and the dollar higher, pushing gold lower in the process. The Fed’s possible dovish pivot may now not happen.

If further data is released in the weeks ahead that points to inflation remaining high or economic strength, the Fed will possibly see no other choice than to hike rates again aggressively at their September meeting.

                                                                                                                                         Source: cnbc.com 

Inflationary data has remained persistent in recent weeks despite previous rate hikes by the Fed. What is seemingly becoming increasingly likely is a period of stagflation.

Although today’s jobs data was a big plus, there have been other areas of the economy that have shown weakness in recent weeks.

If you are ready to take action, >>>>see our list of the top 5 precious metals IRA companies (cash sales also available).

Stagflation Could Be Damaging For Investors

What Is Stagflation? And Why You Should Worry About It!

The combination of inflationary pressures with economic weakness could point to stagflation setting in. Under this scenario, the economy loses strength and growth comes to a halt as inflation remains abnormally high.

Stagflation can be a short-lived affair, but more than likely could remain in place for several months or years.

An extended period of stagflation could damage not only the economy and markets but investors as well. Incomes remaining stagnant as prices stay elevated or rise even further is not a recipe for healthy markets. As the squeeze continues, investors will have no choice but to cut back on their investing.

Cutbacks by investors can pressure stock markets and keep risk assets depressed. As the problem becomes increasingly prolonged, consumers can also cut spending in other areas that exacerbate the economic stress. A cycle is built over time that becomes very challenging to break free from.

US/Chinese Tensions

US/Chinese tensions have not yet eased. China is conducting further military exercises around Taiwan following this week’s visit to the island from US House Speaker Nancy Pelosi. The escalation is worrisome as there had already been talking of a possible Chinese invasion of Taiwan before the Pelosi visit.

Like the Russian invasion of Ukraine, a Chinese military action against Taiwan could be problematic for the global economy. Such a scenario could potentially put Asia on lockdown, cutting off key supply chains in the process.

This may only add to global inflationary woes and could keep prices for goods in the area highly elevated for some time.

Today’s jobs data may make it difficult for those arguing the US is already in a recession. Although growth may have slowed, the jobs market still appears to be rock solid.

If the Fed has less reason to be concerned about recession when it next meets, it may look to keep raising rates aggressively to get inflation under control.

If you are ready to take action, >>>>see our list of the top 5 precious metals IRA companies (cash sales also available).

Can The Fed Get Inflation Under Control?

>Whether the Fed is able to do enough to get inflation under control is another matter. Barring a run in rates to Volcker-era 20% levels, the Fed may lack the ammunition necessary to get prices back down to earth.

Should inflation become entrenched, the Fed may no longer have the power to fulfill its dual mandate as changes in policy could become meaningless.

New Wave Of Gold Buyers

The gold market remains in no man’s land. The bears are still targeting a close below the $1700 level. The bulls need to produce a close above the $1800 area.

Despite today’s declines, the bulls are still within striking distance of testing the $1800 level. A close above could attract a fresh wave of buyers that could potentially drive prices quite a bit higher, possibly even to the $1900 level before needing a break.

Safe Wealth Protection

The best way to invest in gold is by owning physical goldMore and more investors turn to gold in times of economic uncertainty, which may be your safest option to protect and grow your wealth as it’s a tangible asset that will never lose all its value. Gold is a store of value that will help you hedge against inflation and a weaker dollar.

To give you a quick overview, gold and other precious metals may help you:

  • Hedge against a weaker dollar and the rapidly increasing inflation
  • Protect from stock market volatility
  • Limit exposure to economic uncertainty
  • Mitigate the effects of geopolitical instability
  • Diminish negative fallout from the coronavirus economic crisis
  • Diversify your portfolio
  • Take private ownership of your financial future

More specifically, a gold IRA allows you to take advantage of a simple and easy IRS loophole. This loophole allows you to hold physical gold and silver with the money you already have saved in your retirement account, completely tax and penalty-free.

This provides a safe way to protect your retirement savings, while also reaping the same tax advantages as a conventional IRA.

If you are ready to take action, >>>>check out the best alternative assets company, Regal Assets.

Best Alternative Assets IRA: Regal Assets

Or, request their FREE gold and alternative assets kit today!

About the Author

Frequently Asked Questions & Answers

Why is gold considered a safe haven investment?

Because gold serves as a hedge against inflation, deflation, currency risk, stock market volatility, etc. Gold is a store of value and should be seen as financial insurance. Historically, gold moves in the opposite direction of traditional securities like stocks, bonds, and mutual funds. When the stock market goes down, the price of gold and silver tends to rise. So, if you are looking to minimize risk, diversify your portfolio, and safeguard your wealth during times of heightened volatility, you should hold physical gold.

Why should you invest in a gold IRA?

You should invest in a gold IRA to protect your retirement savings account and make sure your assets are safe and secure, while also ensuring that your wealth will appreciate. By investing in gold and other precious metals through a gold IRA, you do not have to worry about a possible stock market crash or inflation, where your paper assets would lose their value. It also allows you to take advantage of a simple and easy IRS loophole that allows you to hold physical gold and silver with the money you already have saved in your retirement accounts, completely tax and penalty-free.

Is a gold IRA a safe investment?

Yes. Your precious metals investments are stored with a custodian, just like any other IRA asset. An IRA custodian is a financial institution that holds your account’s investments for safekeeping and sees to it that all IRS and government regulations are adhered to at all times. The custodian could be a bank, credit union, trust, or another company called a non-bank custodian.

Can I store my precious metals at home?

Non-IRA precious metals, yes. Not metals in an actual gold IRA. IRS rules forbid keeping your IRA precious metals at home or in a standard safety security box. They must be held by an approved non-bank trustee or a bank within IRS guidelines that restricts access and keeps all precious metals segregated by the customer. This ensures exact metals purchased by a specific customer are returned to that same customer once legal distribution requirements are met.

In other words, just like a Traditional IRA, the access to the precious metals in your Precious Metals IRA must be restricted in specific ways to ensure deposit and disbursement laws are followed.

Is the value of the precious metals I buy for my IRA guaranteed?

No. Like all investments, the future value of precious metals is not guaranteed and can rise or fall based on a variety of market influences. This is why it is good to diversify your portfolio with other asset classes such as cryptocurrencies, real estate, etc.

Should I invest in physical gold, future options (EFTs), gold mining stocks, or gold funds?

Indirect forms of investing in gold are much riskier than physical metal. You are relying on any third party individual or company to look after your wealth for you, and depending on the company’s success or failure, you risk losing your investment. With physical gold, you are in control of your wealth. Physical gold offers you that layer of protection and security which Gold Exchange Traded Funds (ETFs), gold mining stocks and funds do not.

Should I buy gold coins or gold bars?

It depends on your individual investment goals and situation. Gold bars are the largest and most efficient way to purchase and store large amounts of gold. They are usually also the most cost-efficient because they have the smallest premium over the gold spot price and the lowest markups for design and transportation. They are also easier to stack and more difficult to counterfeit.

Gold coins are smaller and more convenient than gold bars, but they are also harder to store because they are easier to lose. Gold coins are less efficient than bars for holding large amounts of metal and some of them may come with a higher premium over spot since they can be marked-up for design or rarity. Although, gold coins are more useful for people who intend to use their gold as money.

When it comes to gold IRAs, only certain coins are IRS approved for inclusion in IRAs. In fact, not all bars or bullion are IRS approved. The IRS or your gold IRA company maintains a list of acceptable forms of precious metals for IRAs.

When will I be eligible for distributions from gold IRA?

At age 59½, you or the beneficiary of your gold IRA can start taking penalty-free distributions from the account, according to the IRS.

About How To Invest Gold

Our Mission

For over a decade, our mission has been to provide investors and retirees with all the information they need when it comes to precious metals and cryptocurrency investing.

Gold backed IRA - Goldco, Regal AssetsNot only do we provide a complete guide on the best ways to invest in precious metals, but we have also carefully vetted the best precious metals companies in the US to help you choose the best provider for your investment needs.

We believe that investing in precious metals and cryptocurrencies through your 401(k)/IRA is one of the best ways to invest in this asset class, due to the tax-saving component. A gold IRA or crypto IRA is the best way to protect your retirement account against an unstable market.

Disclaimer: The owner of this website is not licensed as an investment advisor and, accordingly, does not make any recommendations regarding clients’ personal investment portfolios. It is recommended that you carefully evaluate and research the risks and rewards associated with investing in alternative assets such as physical precious metals and cryptocurrencies before you make a purchase. Learn more in our Terms of Service.

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