What are the risks in this overvalued stock market
Posted onIn our latest economic report, we discussed overstretched valuations for U.S. stocks as an opportunity to take profits and purchase precious metals and collectible coins at reduced prices.
Were not the only firm noticing the risk of elevated valuations as stock market indexes continue to push higher. As one example, Cumberland Advisors, a registered adviser with $2.4 billion in assets under management, recently took profits from their equity positions and move the proceeds into cash. As firm chairman David Kotok wrote in a December 12 commentary: At best, stocks are fully priced. There is little margin for a stumble now.
Still, stocks continue to charge ahead into rarified air. Investor optimism is surging as the major equity indexes cross into record territory. Fund managers are moving sideline cash into stocks and raising equity allocations to two-year highs. This market rally is beginning to look like its running on emotional vapors.
Of course, stock prices alone cant tell you if the market is overvalued. Earnings matter in the equation too. The S&P 500s current price-to-earnings ratio of around 25 reflects the recent run-up in stock prices, although corporate earnings rebounded as well in the 3rd Quarter.
Yale economics professor Robert Shiller developed a different approach for calculating the P/E ratio, using a long-term moving average for earnings adjusted for inflation (rather than the 12-month trailing or forward earnings used in the basic P/E ratio.) Shillers cyclically adjusted price-to-earnings ratio, or CAPE ratio, is not a perfect tool and shouldn’t be used to predict future market returns. It can, however, be helpful for setting expectations when considered with other barometers of market valuation. (Here’s more about CAPE from the source and a discussion the ratios shortcomings.)
As of this writing, the CAPE for the S&P 500 Index sits around 28. That’s as high as its been since the bear market of 2000-2002. For a long-term perspective, the CAPE ratio average, going back to 1926, is 17.
Ben Carlson of Ritholtz Wealth Management recently analyzed CAPE at different ranges, looking at the annualized S&P 500 returns over the ensuing three-, five- and ten-year periods. When CAPE has been above 25, the S&P 500 has under-performed in the intermediate- and long-term. The best returns, on the other hand, have come when CAPE is at least below 15.
But average annualized returns don’t tell the whole story. Just because one gauge shows an overvalued market now doesn’t mean its due for a correction soon. Consider the range of returns when CAPE has been over 25: annualized returns over the next three years have been as high as 29%. But they’ve also been down as much as -42%.
Here’s another way to look at it; the lowest highs and the lowest lows for the S&P 500 Index have occurred when stocks have been at the highest valuation level (using CAPE as the barometer).
Here’s the takeaway for investors on looking at these valuation gauges: The stock market bulls may continue to run, even with valuations at their current nosebleed levels. If that’s the case, strong equity performance will likely come at the expense of gold and precious metals values.
But as long as the P/E readings stay elevated, the risk of stock market downturn remains high. And that downturn, if and when it happens, has the potential to be significant.
Such a reversal in momentum will likely swing investor sentiment back toward gold and other precious metals and tangible assets. That’s why we believe investors who maintain their gold allocations or even better, can add to them in this recent spell of price declines are positioned well for the current high-risk investment climate.
6 Things You Can Do Now To Maximize Your Wealth In 2017
Posted onWhen it comes to building wealth, one of the most important factors in achieving that goal is setting a plan. Millionaires usually don’t just strike it rich through the purchases of a lottery ticket, it generally take hard work, following a plan and a proper investment diversification strategy.
Here is a checklist of 6 items you can do now to help make 2017 your best financial year ever.
#1. Pay Yourself First
When it comes to building wealth, you have to pay yourself first. Can you save 20-25% of your net take-home pay? Strive for that goal in 2017. Even if you just notch up the savings by 1% that can make a significant difference over a 20-year period.
#2. Define Specific Financial Goals And Set Dollar Amounts
Studies show that investors who set out specific financial goals are more apt to actually reach their goals. Whether your financial goals include, saving for retirement, stashing cash for your kid’s college education or wedding, buying a vacation home or an exotic vacation be specific and write them down.
Instead of just “saving for retirement,” define your actual goals. Example: “Retire by the time I’m 62, with $1.5 million in savings and live on a beach.” Attaching a dollar amount, and a time horizon to the goal can help you develop a plan to actually meet that goal.
#3. Get Professional Advice
You wouldn’t attempt to do surgery on yourself, you’d find the best surgeon available. Financial planning can be complicated. Smart investors lean on professionals who follow the markets every day for advice and counsel. At Blanchard and Company, we work with our clients for the long-term, building relationships that last decades. Each client is assigned to a portfolio manager who takes the time to listen and understand your long-term investment goals, your time horizon and risk tolerance. Relationships matter at Blanchard.
#4. Rebalance Your Portfolio At Least Once a Year
Many investors often forget to rebalance their asset allocations at least once a year. Here’s what that means. Let’s say an investor has a 60% allocation to equities, a 30% allocation to bonds and a 10% allocation to physical tangible assets like gold and silver bullion. The recent rally in the stock market likely means that your equity allocation now exceeds the 60% level and your portfolio may be exposed to more risk than you intended.
Take the time now to examine your current holdings and make adjustments to ensure that your portfolio still matches your target percentage allocations. Within your tangible assets allocation we have identified an asset allocation strategy that offers the best performance after five years. That includes exposure to numismatic rarities, mint state gold and bullion and investment grade gold. Learn more here.
#5 Make a Commitment to Stay Educated
Smart investors stay informed. Economic and financial market expectations have shifted dramatically over the past month. Many on Wall Street are now pricing in forecasts for faster economic growth and higher levels of inflation. However, there remains a great deal of uncertainty as to what types of proposals the new Administration will be able to enact and what their impact could be on the markets. At Blanchard, we offer high-quality market commentary, forecast and outlook several times a week on our website. Bookmark this page or sign up via our email newsletter to follow the analysis.
#6 Max Out Your Retirement Contributions Consider A Gold IRA
Did you get a year-end bonus? Instead of spending that on a trip to Hawaii or a new kitchen remodel funnel at least a portion of it into your retirement account. Fully fund your retirement accounts if possible. The experts say the number one thing you can do to improve your chances of meeting your goals is to increase your savings rate, and let the power of compound interest and time work in your favor. Individuals can contribution up to $18,000 to your 401k, or $24,000 if you’re over age 50, in 2016.
IRAs are easy with Blanchard: Many clients who are concerned about the purchasing power of their retirement funds choose to open up a Gold IRA. The IRS does allow individual investors to own certain gold and silver coins in an IRA account. Blanchard and Company is proud to offer a precious metals IRA option of its own. Visit our IRA page here, where you;ll find a brief one-minute YouTube video outlining the procedure of establishing the account.
Its an easy 3-step process: 1) Verify or create your IRA; 2) purchase bullion; and 3) deposit the bullion with your custodian.
Following these simple steps can help you on your journey to achieve your goals. Best wishes to you and your family during this holiday season.
Is A Trump – Yellen Showdown Ahead?
Posted onNo surprises at Wednesday’s Federal Reserve meeting. The U.S. central bank team headed by Chair Janet Yellen pulled the trigger on the first interest rate increase in 12 months, nudging the Fed’s benchmark rate to a still ultra-accommodating 0.50-0.75%.
In the minutes after the widely expected interest rate hikes:
- Gold prices ticked slightly lower.
- The U.S. dollar jumped higher.
- Treasury yields gained.
- Financial stocks turned broadly higher.
While this week’s interest rate move was widely expected, a bigger question heading into 2017 is what will President-elect Trump think of the rising interest rate environment? The Fed now projects a total of three interest rate hikes in 2017, up from a previous two.
Higher Borrowing Costs for Consumers
This could begin to trigger a rise in borrowing costs throughout the economy impacting individual consumers with slightly higher rates on mortgages, car loans and credit card rates.
No doubt some traders will be monitoring President-elect Trump’s Twitter feed, which has become a market mover as of late.
A Trump tweet earlier this week which called Lockheed Martin’s F-35 Joint Strike fighter costs “out of control” triggered a quick sell-off in Lockheed Martin’s stock, initially wiping out $4 billion of the company’s market value.
President-elect Trump did suggest that Janet Yellen was keeping rates low during the campaign to support the outgoing administration. He also suggested that low rates were creating a “false economy.”
Historically, United States presidents have avoided interest rate talk in deference to the Federal Reserve’s independence. The incoming President, however, has already shown a willingness to break tradition on other matters during his transition.
At the heart of the matter is that President-elect Trump’s proposals to boost economic growth through lower taxes, deregulation and billions of dollars of infrastructure spending will also likely boost inflation.
One of the main jobs tasked to Janet Yellen and the Fed is to keep inflation under control and their main method for doing so would be a shift to a more aggressive interest rate hiking cycle.
Are Stocks Near A Climax?
The stock market is shouting out a great big hurrah right now. Stocks are cheering as the Dow Jones Industrial Average approaches the 20,000 mark for the first time in history. However, analysts are also warning that the market is extremely overvalued, which leaves it vulnerable to a turn.
As the calendar prepares to flip to 2017 in just a few weeks, not only are stock prices in the nose-bleed section, but a developing brew of inflation and higher interest rates could be the trigger the brings the stock market bear back out of hibernation.
Is your portfolio properly hedged? Gold and other tangible precious metals assets have the proven ability to diversify and protect a portfolio against stock market declines. We, at Blanchard and Company, believe that gold and silver bullion in physical form is an appropriate asset for a small portion of any properly diversified investment portfolio. Call us today at 1-866-827-4314 for a confidential consultation with one of our portfolio managers.
The Blanchard Economic Report
Posted onMany investors are aware that the stock market has surged to new all-time highs since the presidential election.
What you may not know is that many on Wall Street are beginning to issue warnings that the stock rally is overextended on the upside. Stocks are gaining in anticipation of infrastructure spending, tax cuts and deregulation. There remain many hurdles to the implementation of these proposals and stocks will fall in disappointment if delays unfold.
Investor Alert: Many clients are using the recent strength in stock prices to take profits out of equities and diversify into metals.
Asset Performance
Despite the recent pullback in metals, gold and silver still beat stocks (data through November 30):
Gold up 10%
Silver up 19%
The S&P 500 up 7.7%.
10-Year Treasuries yield 2.36%
Looking Into the Crystal Ball For 2017
The big picture, long-term macro view remains gold-bullish.
As the stock market sits at all-time highs, valuations are overstretched. The stock market remains ripe for a corrective pullback, or even a cycle turn. Gold and silver have a negative correlation to stocks, which means as stock prices fall metals prices historically have climbed often significantly. If a bear market cycle in stocks begins in 2017, metals would benefit strongly.
Other potential bullish drivers for gold in 2017 include:
Protectionist trade policies: If trade frictions with other nations begin to unfold on the global stage, gold will benefit in 2017.
Geopolitical concerns: A number of hot spots around the globe, including Syria, are ripe for disruption, which would generate strong demand for metals as a safe-haven and amid flight-to-quality.
Inflation is already rising. Gold and silver are traditional inflation hedges and tend to rise in value during inflationary periods.
US Coin Demand
Weekly sales of U.S. Mint gold and silver coins spiked during November, climbing to their highest levels since January when the new 2016 dated coins were launched. Individual investors both in the U.S. and abroad continue to diversify portfolio holdings with physical gold. The physical demand outlook remains extremely strong.
Predicted Price Trading Bands, Next 90 Days
Gold $1,125-$1,250
Silver $16.00 – $17.80
Our Recommendations:
Buying Rare Coins:
The high-end rare coin market continues to grow
For investors able to hold at least 10 years, ultra-rare acquisitions offer the safest store of wealth and strongest growth potential
Buying Precious Metals:
The price retreat off the summer highs offers long-term investors a better entry point
An accumulation strategy is probably the best bet for clients wishing to add to holdings
Trading Precious Metals:
Silver continues to offer a better value than gold
Ratio: 71 oz. silver = 1 oz. gold
This ratio has averaged 55 to 1 over the past five years
You may want to consider converting some gold holdings to silver
Popular silver products: 10 oz & 100 oz. silver bars, Silver American Eagles in monster boxes.
The recent price retreat offers investors an excellent entry point for both gold and silver investments. Give your portfolio manager a call today at 1-866-827-4314 to discuss current market conditions and potential shifts you may want to consider to your investment picture.
After the Trump rally, will the momentum last?
Posted onPresident-Elect Trumps victory on Election Day served as an inflection point in the financial markets. U.S. stocks have surged in the month since the election, with the major large-cap indexes hitting record highs in late November.
On the flip side, bond prices have dropped with the jump in bond yields. Rates on benchmark 10-year U.S. Treasury notes have climbed in the four weeks since Election Day, from 1.8% to nearly 2.4%. Gold prices are also down over 8% over this time.
Investor trends are clearly rotating, away from relatively safe haven asset classes such as bonds, precious metals and hard assets, and toward riskier assets such as stocks. But how much of this shift is for real?
There has been a lot of emotion in the move toward equities since the election. Investor optimism seems to have turned on a dime as Wall Street largely cheered Trumps pro-business perspectives.
Many investors anticipate market-friendly policies from the incoming Trump administration, including lower taxes and higher government spending on defense and infrastructure. But how much of Trumps agenda comes to pass is for the most part unknown, depending on how much opposition he may face from the traditional deficit hawks among Congressional Republicans.
Seasoned investors know that investor sentiment can often be fickle. Many have seen emotionally charged market rallies fizzle when confronted with reality. Thats certainly could happen in this latest bull market run.
But emotion isnt the only factor driving the divergent paths of stocks, bonds and precious metals. Strong economic conditions are also underpinning the recent trends toward risky assets such as equities and the flight away from the relative safety of bonds and hard assets.
It wouldnt be surprising to see the stock rally lose some steam once investors emotions cool off. But the following factors may help keep momentum moving in the direction of stocks, with an inverse effect in the bond and precious metals markets.
Recharged economic growthAnnual growth for U.S. Gross Domestic Product (GDP) was revised up to 3.2% for the 3rd Quarter. Thats the strongest pace of economic growth since the 3rd Quarter of 2014. Plus, its well above the average quarterly GDP growth of 1.8% since 2015.
Much of the surge in economic activity was attributed to personal spending, including an 11% increase in durable goods orders. Exports also gained at the fastest pace in nearly three years.
The jump in GDP growth is a welcome signal for future expansion, especially after nearly two years of sluggish growth and concerns about economic stagnation.
Easing deflation fearsThe sharp rise in bond yields came as investors reset their expectations about inflation. In recent months, market worries had focused more on the threat of deflation, especially as the trend of negative interest rates swept through the global government debt markets.
Now it appears prices are on the upswing and fears of deflation on the wane. Headline inflation in the U.S. is at a two-year high of 1.6% in October. Recent inflation reports from Japan, China and the Eurozone also showed a trend of rising prices.
Higher prices usually spell bad news for an economy. But after a long spell of little to no inflation, the recent upward pressure may in fact be a positive sign for future global growth.
Job and income gains Employment has been a consistent bright spot in the current economic expansion. Job market growth in November was on par with recent reports, with 178,000 jobs added during the month. The unemployment rate in the U.S. touched a nine-year low at 4.6%, although a drop in labor force participation was a factor in this decline.
Wages and income have been slower to recover, but in recent months both have shown improvement. Personal income rose 0.6% in October, its best monthly gain since April. Average hourly wages declined slightly in October, but were up 2.5% on an annual basis for the month.
Brighter consumer optimismImproving prospects for employment and income tend to make consumers feel more confident about the future and more comfortable about spending money. Both areas have seen rising strength in recent months.
Consumer confidence jumped to a nine-year high in November according to The Conference Board, exceeding many analysts expectations. This confidence was apparent at the nations cash registers, where retail sales grew at an annual 4.3% rate in October 2016.
The rebirth of the consumer is critical to future economic growth, because consumer spending typically represents two-thirds of the U.S. economy. As the job market expands and income grows with the humming economy, higher consumer spending should help keep the momentum going.
What could throw a wrench into the works for this scenario? Again, the risks go back to the uncertainty over Trumps economic proposals. While plans for cutting taxes and ramping up infrastructure spending should provide a boost to the U.S. economy, any improvement could be undercut by his hard line on trade.
Tariffs and other restrictions on global trade may offer relief to some areas of the economy, but it will likely come at the expense of another. President-Elect Trump and his GOP allies in Congress will need to pull off a balancing act between promoting economic growth and protecting the interests of U.S. workers and businesses.
The good news is, they can start from a strong foundation of economic expansion. This will likely sustain current market trends for the near term. But the prevailing risks to the economy require investors to pay some attention toward wealth preservation. The recent dip in precious metals prices is a good opportunity to put a strategy in place at lower costs.
Call your Blanchard portfolio manager today to discuss the current outlook and options that may be right for you at 1-800-764-9135.
Avoid These 4 Mistakes When Buying Coins As An Investment
Posted on — 1 CommentIndividuals are turning to precious metal coin investments as a way to diversify their portfolios in today’s uncertain world. Gold and silver have posted double-digit returns in 2016 and are beating overall stock market performance. The metals markets have unique properties that have allowed individuals to build and store wealth for centuries.
In today’s online buying world, it does make a difference regarding who you buy from – and not all sellers have your best interests at heart. When it comes to buying coins as an investment avoid these four common mistakes.
Mistake #1: Don’t Buy Novelty Coins
Novelty coins are often sold on late-night infomercials or on a plethora of Internet sites. These can include commemorative medallions or coins with unusual shapes or kitschy appeal. At Blanchard, we believe that firms that sell novelty coins at high markups damage our industry reputation and prey on in the inexperience of most consumers. As a matter of policy, we dont sell these products because we don’t believe in their investment value. Anyone telling you differently is giving you bad advice and should be avoided.
Mistake #2 Don’t Buy a Broad Array of Coins
Stay focused on a few bullion products as you build your hard asset portfolio.Choose quality over quantity.At Blanchard, we only sell a small subset of bullion products available on the market. Why? We are in the business of helping serious investors and rare coin collectors build long-term wealth. Serious investors dont need a large variety of products to build a solid portfolio. Anything more than what we offer adds complexity and confusion when you go to sell your holdings.
Mistake #3 Don’t Overpay For Coins – Where You Shop Matters
We do not like the flea market sites that sell thousands of products. Most of the products at these sites are overpriced and it is easy for consumers to overpay for commodity bullion. At Blanchard, we stake our business on being honest, open and forthright with every client we serve, and we take great pride in our reputation for integrity. We have your best interests at heart. We partner with our clients to help them build a suitable hard asset bullion portfolio that fits with your risk appetite, and your long-term investment goals.
Mistake #4 Fail To Get Precious Metals Investment Advice
It is all too easy to “click and buy” in today’s Internet age. But, when it comes to building a solid coin portfolio that can truly offer you diversification and wealth building properties, we believe that most of our clients benefit by talking to one of our Portfolio Managers before they make any purchase.
The precious metals market is complicated and in constant flux. We follow it closely on a day-to-day basis. Getting a second opinion before you buy can dramatically improve your purchasing power and help you avoid making a bad purchase that you may regret.
Our advisors can also help educate you on topics such as setting up precious metals IRAs, inheritance issues, how to store and insure your coins, diversification and much more. If you simply have a question and aren’t ready to buy yet please give us a call – we are happy to help.
The Blanchard Difference
We are the premiere tangible assets advisor in the United States for serious investors and serious collectors. Blanchard is a family-owned company that has been in business for over 40 years. It is our intention to offer very competitive prices for our bullion products. If you find a cheaper price on the Internet, please let us know and we will aspire to match or beat that price. Your 100% satisfaction is paramount to us. Our Portfolio Managers are always available to help at 1-866-764-9135.
Does Jobs Data Mean The Economy Is Coming Up Roses?
Posted onLast week’s release of the November unemployment rate on the surface may appear that the economy is coming up roses.
The news: The U.S. economy added 178,000 jobs in November, while the unemployment rate fell to 4.6% – the lowest reading in more than nine years.
Digging deeper into the details of the report, there are some trends emerging that warn of potential black clouds looming on the horizon for the economy.
Here are 4 key trends seen inside the details of the latest report:
- The unemployment rate fell primarily because people left the workforce.
- The trend in job growth is slowing.
- Wage growth slipped in November.
- Inflation is eating up a larger portion of consumer’s take home pay.
Here’s what you really need to know. The latest report revealed that about 200,000 people left the workforce, or simply gave up looking for jobs, which contributed to the sharp drop in the overall unemployment rate.
The hiring trend is slowing. Job growth averaged 180,000 per month this year. However, notably, over the last three months, it has averaged 176,000 jobs, compared with an average of 223,000 between June and August.
Also, according to the November employment report, retailers hired fewer seasonal workers in October and November 2016 than they did the last few years.
The slowdown in wages is a worrisome economic story. How much consumers take home each month matters for spending power. The good news of 178,000 new jobs created was offset by the average hourly earnings number which showed a drop of .1% month over month. Average hourly earnings fell 3 cents in the month, marking the first decline since December of last year.
Rising inflation, including higher gasoline prices are eating up a larger portion of their take-home pay.
What Does This Mean For Precious Metals?
Gold prices leapt to a higher close on Friday in the wake of the U.S. employment news. The Federal Reserve is widely expected to hike interest rates at its December meeting. But at this late point in the economic cycle, the odds suggest that the central bank will be unable to normalize its interest rate before the next recession hits. That leaves open the door to negative interest rates here in the U.S. just like they have in Europe and Japan. That is gold bullish over the longer-term.
Gold suffered a setback in a risk-off trade immediately following the election. The stock market may well have gotten ahead of itself by pricing in a lot of ‘good news’ for the economy that will have to come to fruition in 2017.
The recent pullback in gold prices offers long-term gold and silver investors an attractive buying opportunity.
Both the stock market and the current economic expansion phase are long in the tooth on a historical basis and cycles are poised to turn in 2017.
Protect Your Portfolio Now
Use this time to consult with one of the Blanchard portfolio managers to assess if your current asset allocation has properly protected your assets. Call us today at 1-866-764-9135.
About Blanchard
We are the premier tangible asset advisor in the United States for serious investors and collectors. We have a long history of providing individuals investors with consultation and investment guidance to help protect and build their hard-earning wealth. We believe that gold and silver bullion ownership is appropriate for all investors as a proven portfolio hedge. Metals are a non-correlated asset to stocks, which means when stocks fall metals increase in value.
Gold and Silver Coins: A Safe Haven Then and Now
Posted onIn the Final Days of World War II
It was April 1945 a month filled with historic events that began with the U.S. invasion of Okinawa. In Europe, the Allied forces captured Hanover Germany on April 10. The Nazi regime was toppling. On April 13, the Soviet troops captured Vienna, Austria. On April 18, the last of the German troops trapped on the Ruhr River surrendered. It was on May 7, when Germany surrendered unconditionally. V-E Day is declared victory in Europe on May 8.
The Gold and Silver Stash
American soldiers moving through eastern Germany came upon a small town called Plauen in late April. There was a post office in the town. A post office employee spoke of a safe inside the building. Unable to locate the key, U.S. engineers broke into the safe with explosives.
Those American soldiers discovered a hoard of gold and silver stashed by the Nazis in that post office that had served as a secret vault. The U.S. soldiers found 900 kilos of gold primarily in the form of coins and 70 kilos of silver, along with Swiss francs, Norwegian kroner and Dutch guilders.
Documents show that the stash was directly linked to SS chief Heinrich Himmler. Historians believe that the SS chief hid this valuable treasure in the small town as an escape fund for S.S. men who might seek to elude Allied justice after the end of the war. It is believed that the Reichsbank used the secret vault in the Plauen post office during the war to hide gold and money as Allied bombing raids obliterated buildings in Berlin.
The U.S. soldiers quickly moved the safe and its contents to Frankfurt for safekeeping as the town of Plauen would be under Russian control once the war ended, according to the famed Yalta agreement.
Today, the exact whereabouts of this gold find is unknown, although historians speculate that it was shipped to the U.S. as part of war reparations and could be housed today in Fort Knox or the New York Federal Reserve.
This somber tale of an exciting gold find is a reminder of the importance of physical gold and silver coins. Throughout history, gold and silver coins have represented a safe-haven of security. A vehicle to build and store wealth in a highly transportable form that you can have in your possession at all times.
Individual investors buy and hold gold and silver coins for many reasons. Safety and security of a portion of one’s assets is one compelling argument for diversification into physical gold. Gold has the power to store and grow wealth.
Getting Started
Blanchard and Company recommends that its clients allocate 10-15 percent of their investment portfolios to gold.We do recommend insuring your stored gold, which does cost a nominal amount of money. But having physical possession of your asset and having a piece of mind that no one can get to it but you makes it worth the relatively small cost.
Keeping gold in a home safe or in a safe deposit box is easy for most people as many investors already own or pay for these types of security services. Riders on insurance policies are usually inexpensive compared to the price of the policy.
Buy From the Best
It goes without saying that investors looking to establish a position in physical gold should always buy from a reputable tangible asset firm that has been in business for a long time. When the price of gold increases, fly-by-night companies can open to take advantage of people like they do in many other industries (such as construction and home repair companies after damaging storms).
Investors should do some research and find a firm that has a well-known and well-established reputation, like ours. We have a long history of providing individual investors with financial counsel and physical metals delivery. At Blanchard and Company we stand behind the authenticity and purity of the precious metals we sell.
Call us today at 1-866-827-4314 for a free and confidential consultation with a Blanchard portfolio manager about your individual investment goals.
Black Friday Alert: Hint, Your Wife Likes the Shiny Stuff
Posted onShoppers start your engines. This year’s Black Friday sales event is forecast to be bigger than ever, with shoppers expected to spend a record $3.05 billion.
Consumers Are Already In a Spending Mood
The final weeks of the presidential election season didn’t stop consumers from spending this year, with a surprise 0.8% increase in the October Retail Sales number. Sales soared as Americans bought everything from cars to clothes to construction materials and health care products. Retail sales have picked up strongly in recent months as amid strong consumer confidence, a firm labor market and a pick-up in wage growth.
The holiday spending season is important to retailers as economists estimate that as much as 25% of all personal spending occurs during the holiday shopping season. Beyond Black Friday, the entire season is expected to pull down big sales numbers. Total holiday sales inNovember and December, are forecast to climb 3.6 percentto$655.8 billion, according to National Retail Federation data.
Jewelry and Gold Price Trends
Gold prices tend to move up prior to the holidays, in part due to an increase in gold jewelry buying for gifts. But, this year a pullback has offered gold buyers a better price entry point.
The strong price gains in gold in 2016 (at one point over 20%) have put a crimp on cost-conscious gold jewelry buyers. Gold jewelry sales fell in the third quarter but still totaled 493 tons, according to the World Gold Council. That’s a lot of necklaces and bracelets.
Big Markets around the Globe Buy Gold Jewelry This Time of Year
Looking ahead, the World Gold Council projects a recovery in the jewelry sector in the fourth quarter. Strong seasonal buying trends are seen this time of year, supported by the festival and wedding season in India, the main holiday season in Western markets, and Chinese New Year.
The first half of 2016 saw the strongest level of US jewelry demand for seven years as the market continued its gradual recovery in the wake of the 20079 financial crisis, according to the World Gold Council.
Wondering What To Get Your Wife, Daughter or Mom?
Here are some key findings from a World Gold Council survey of surveyed 2,000 US females aged between 1865:
Fine jewelry is more likely to be received as a gift, often bought by a spouse or partner, more likely to be a planned purchase, and is more likely to be a high value transaction.
Gold resonates particularly well with those consumers looking to buy a piece of jewelry that they feel is associated with tradition or reminds them of a special moment in their life. A key strength of gold for these consumers is that it keeps an inherent emotional and financial value over time and can be passed to the next generation, the World Gold Council found.
Gift Ideas for Your Husband, Father or Son
Do you have a history buff in your family? Gold coins are a collectible, but also an investment. What a better gift for the man in your life than a rare coin. Choose one to match an important date in their or your lives. Consider commemorative coins, which are widely popular and reflect the rich cultures of numerous civilizations.
Ancient Greeks and Romans used commemorative coins for a variety of record-keeping purposes, everything from honoring important events to relaying the daily news.
Commemorative coins cultural influence continues today as they play a fundamental and distinctive role in the U.S. rare coins industry. In addition to aesthetic and monetary value, each coin is deeply embedded in our nations history. These reasons make commemorative coins a highly promising investment option.
Black Friday is just getting going. Pick your gifts wisely. Consider gifts that can help to bring your family closer through beauty, historical significance and can offer the opportunity to build and protect your wealth at the same time.
Unlike bullion coins that are bought in bulk, rare coins must be carefully chosen on a one-by-one basis, and this requires a highly trained eye to spot opportunities. Dont go it alone. Blanchard and company can help you find what you need with the highest levels of speed, confidence and personalized service. Call for a consultation or just to learn more today 1-800-764-9135.
Could 2017 Be The Year Of Inflation?
Posted onIn recent years, inflation in official government figures has been virtually non-existent. In fact, the Federal Reserve and other central bankers around the globe have been valiantly trying to stimulate inflation to no avail.
The perfect storm may be brewing for 2017 and money velocity — the speed at which money changes hands throughout the economy — may be finally about to kick into high gear.
Markets Are Already Signaling Potential Inflation Ahead
In the wake of the surprise election of President Trump, the yield on the U.S. Treasury note surged from 1.77% before the election to 2.27% just a few days after the results were in this represents a startling rise in interest rates in a very short period of time. Bond-holders are dumping Treasury notes (the price moves inverse to the yield) as they anticipate inflation on the horizon.
Where Could The Inflation Come From?
One of the signature proposals by President Trump includes a $1 trillion infrastructure spending plan to rebuild the country’s roads, bridges and even airports. This plan is intended to create jobs and stimulate growth. Wage growth is good except too much of a good thing can quickly turn bad. Economists are already warning about the potential for inflationary pressures to rise quickly.
The increase in inflation could arise from several areas, not only the infrastructure plans. Another key proposal from the President includes repealing parts or all of the regulations imposed on the banking sector in the wake of the global financial crisis. Bank lending is expected to pick up as regulations are eased, which could help to stimulate inflation and money velocity.
How Does Gold Fit Into This Puzzle?
Gold slid lower in the days after the election in a “risk-off” type of financial trade. Stocks rallied in euphoria that pro-growth policies could lie ahead, which removed short-term demand for gold.
The gold price quickly found support in the $1,215 per ounce zone as emerging market buyers jumped in to buy physical demand at the lower price point, notably from China.
The lower prices in gold were viewed as a buying opportunity for long-term investors.
Western investors face a bevy of uncertainty ahead, including how the new Administration’s policies will truly impact the economy. Rising inflation remains a key risk, along with the potential for heightened geopolitical tensions. The President-elect has questioned at times the NATO allianceand also threatened to slap tariffs on China and potentially start a global trade war.
Gold has a solid track record as an inflation hedge, and an “insurance policy” against geo-political and economic uncertainties. The Chinese have rushed into the market this week at the lower prices points as they perceive gold around $1,225 an ounce as a bargain.
U.S. investors have the opportunity to build their hard asset allocation now at a better price point than three months ago. The 2016 uptrend in gold remains intact. It makes sense to use the price dip as a buying opportunity to diversify your portfolio against the uncertainty that lies ahead.
Call your Blanchard portfolio manager today to discuss the current outlook and options that may be right for you at 1-800-764-9135.
