Investors are struggling to make sense to nature again and out of the rates of President Donald Trump, the next movements and the broader geopolitical uncertainty that grabs the world.
It has entered its first correction since October 2023, falling 10% from its recent. Meanwhile, prices have increased to record levels, exceeding $ 3,000 per ounce for the first time.
The headlines shout “Recession!” One day and “Strong labor market!” the next. With so much noise, how should investors respond?
Tariffs, uncertainty and mixed economic signs
The uncertainty of commercial policy is one of the greatest forces that promotes markets at this time. One day, Trump imposes new tariffs on Canada, Mexico and China, sending the lowest markets. The next day, the scale.
This type of round trip makes it difficult for companies to plan, as suggested by a recent CEO survey. Looking to the future 12 months in the future, the commercial optimism of the CEO fell to 4.99 this month, a 28% decrease from January and the lowest level recorded since the spring of 2020, when the pandemic closed the global economy.
However, they are not just tariffs. Recent economic data have been throughout the map. It sank this month at the lowest level since November 2022, according to data from the University of Michigan. Retail sales slowed in February, submerged and the activity decreased. However, the labor market remains strong, with historically low and growing wages.
Some economists are convinced that a recession is just around the corner. The GDPnow model of the Atlanta Fed, for example, predicts that the United States economy will be reduced by 2.4% in the first quarter.
Meanwhile, Pimco sees a 35% probability of an American recession in 2025, compared to only 15% last December. JPMorgan puts the probabilities at 40%, warning that Trump’s commercial policies could damage the US position as a global investment destination.
On the other hand, some analysts argue that the fears of a recession are exaggerated. For example, FACTSET reports that fewer S&P 500 companies mentioned the “recession” in their latest earnings calls that at any time since the beginning of 2018.
Still confused?
The smart investor crosses the noise
When faced with mixed messages, it is easy to be trapped in market changes in the short term. But history teaches us that corrections are a normal part of investment. The markets do not move in a straight line, and recessions often present purchase opportunities for those who remain sensible.
Take a look at the coverage funds. Some of the recent market weakness may not be about the economy, but of the actions of the coverage funds promoted by those who. According to JPMorgan’s strategist, Nikolaus Panigirtzoglou, the capital coverage sector and capital telecommunications, coverage coverage funds aggressively reduce their capital exposure in February, promoting the sale pressure in the market. That is not a fundamental problem, it is technical. Markets can balance in the short term for all kinds of reasons that have nothing to do with the real economy.
And let’s not forget Fed. Inflation can still be a concern, but many investors expect the Central Bank to reduce fees at the end of this year. Historically, rates cuts are good for stocks and excellent for gold.
Why I think gold belongs to your wallet
At times like this, I always return to one of my central investment principles: the 10%gold rule. I recommend that investors maintain 10% of their portfolio in gold: 5% in physical gold (bars, coins, jewelry) and 5% in mining golden or ETF gold actions. I discovered that this strategy has provided stability and upward potential in volatile markets.
Gold has been in a tear, reaching records. Because? Because it thrives in uncertainty. When investors do not know what to believe, when the right markets, inflation concerns persist and geopolitical risks increase, Gold has tended to shine. The central banks around the world are a clear sign that the main institutions see it as a value reserve in the midst of economic turbulence.
Meanwhile, gold mining stocks offer leverage to gold prices, as I told Liz Claman de Fox Business last week. While the metal itself has risen, many gold miners remain undervalued compared to historical trends. I think this presents an attractive opportunity for investors who seek to obtain exposure to the advantage of gold.
Get to your long -term goals
If you have been in the markets enough time, you know that the corrections come and go. The S&P 500 has experienced dozens of them over the years and yet continues to reach new maximums over time. Panic and decision -making decision making is one of the biggest mistakes that an investor can make.
The same applies to gold. If you still do not have an assignment, I think it is now a good time to start building one. Keep the course and consider using market sauces to add to your position.
As investors, our work is not predicting the next movement in the market, it is to build a resistant wallet that can resist any storm. That means crossing noise, focusing on long -term trends and making sure it has exposure to real assets such as gold that have a history of providing coverage against uncertainty.
Happy investment!
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Discharge of responsibility: The S&P 500 Actions Index is a widely recognized capitalization index of 500 prices of common shares in US companies. The CEO’s trust index traces confidence in current and future business environments, based on the observations of the CEO of several economic and commercial components. The Michigan consumer’s feelings index (MCSI) is a monthly survey that collects information on US consumer expectations with respect to the economy in general. The GDPnow of the Bank of the Atlanta Federal Reserve is a forecast model that provides a “now casting” (an estimate in real time) of the official growth rate of the Gross Domestic Product (GDP), which the Office of Economic Analysis (BEA) publishes with a delay.
All expressed opinions and the data provided are subject to changes without prior notice. Some of these opinions may not be appropriate for all investors. When clicking on the previous links, a third -party website will be directed. US Global Investors does not support all the information provided by this/these websites and is not responsible for its content.
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