Gold price up
Indeed, gold and silver have proven resilient and gained in value as Wall Street took a post second half breather this week and stocks showed signs of entering a correction phase.
If you are looking for the undervalued asset class then surely it is precious metals. Their correction is done and dusted while stocks and bonds have their reversion to long-term averages to come.
Investors seem to have great confidence in the Fed and its money printing to produce the inflation that will help to jump start the global economy. Yet if it achieves that aim that won’t be good for bond or equity prices.
You only have to look back at the most recent historic example of the 1970s to see that inflation is bad news for financial markets and good news for real assets like oil, gold and silver.
Timing this transition is always the difficult part. Getting the next transition right, on the other hand, ought not to be so problematic. Sitting still is not a good option as corrections start.
Thinking more than a few days or weeks ahead when you have a lifetime measured in decades is only logical and how the real investment superstars win over time.