by Gary Christenson, goldstockbull: Conventional “Wisdom:” Markets move up and down, but the stock market always comes back. The DOW is frothy and needs a correction, but the stock markets are healthy and big gains lie ahead.
Pessimistic version: Jim Rogers said, “the next crash will ‘the biggest in my lifetime.’” [Coming soon …]
Question: Given the craziness in politics, the Middle-East, Central Banking, and global debt levels … do you own enough gold bullion?
“Trump will save the markets, reduce taxes, and boost stock prices even higher.” [Don’t plan on it.]
“Gold pays no interest and has gone down for six years.” [True but irrelevant.]
“The Yellen Fed can’t let market bubbles pop so they will create more QE, more bond monetization, “printing,” and Fed support. In short, the ‘Yellen Put’ is alive and will protect investors.” [Maybe not…]
“The market got hurt in 1987, 2000, and 2008. It rallied back each time and went higher. This time will be no different. Stocks may correct but they are a good long term investment.” Read “The Bull Case: S&P is heading to 3,000.” [How big a loss before the rally?]
In the long-term the S&P probably will hit 3,000 but the short-term risk is substantial. The attractive lie is appealing but not necessarily true. Sometimes reality is harsh.