The last few weeks have been pretty turbulent: import taxes imposed by the current US government caused losses on stock exchanges around the world, cryptocurrencies tumbling in a free fall, many investors are all at sea and try to minimize the losses by selling off some of their rapidly declining stocks…
Such turbulent times offer usually also unique opportunities to invest.
What about protecting your assets during such times?
Does it make sense to invest in real estate or in precious metals while the courses on stock exchanges and coins seem to know only one direction – towards south? And would such investments really protect your earnings from devaluation and losses?
The basic wisdom of investors is valid also in the current times:
- Keep calm
- Trade anti-cyclical
- Diversification helps to protect
Based on diversification strategy and your investment horizon, real estate can definitely make sense. But if you wish to park your cash just for time until the stock exchange stabilizes and changes the overall direction from bearish to bullish, real estate would be probably less suitable.
Here, you have much more flexibility with precious metals.
But what happens with precious metals during these times?
Here we need to distinguish between gold and silver. Silver being not only the asset but also an industry metal, it is more sensitive to the industrial needs and more volatile. As the economies around the world are currently uncertain about the future, fear and greed index shows “extreme fear” expecting further decline of the worldwide economy. A possible recession can cause a lower demand for commodities, which we currently see on an example of petrol (prices going down), but also the silver prices dropped by roughly 10% from the beginning of April.
Gold, for its part, dropped slightly and shortly as many investors tried to cover the losses from the stock exchange by selling certain profitable gold positions, but overall, it continues climbing up. After a good last year 2024 with 27% overall increase, the current increase year to date is at around 19% already. With it, gold is proving its role as a hedge against macroeconomic uncertainty.
The price development of silver and gold let increase the gold-silver ratio up to over 1:100 (at the time when this article is being written the GSR is at 1:101,05, but it was even higher few days before).
What does it mean exactly? As you may have read in our December article about the swaps of precious metals, this high ratio does not happen often (in the last 35 years this is only the third case!) and means that silver is currently extremely undervalued compared to gold. If you look at the charts of similar increases in the past, you’ll notice that afterwards the ratio was sooner or later dropping more or less by half from the top.
By applying the swap strategy, it is possible to double your gold reserves without any additional investments.
Surely, it is not a good idea to provide general recommendations, especially on financial topics. And the historical data is not a guarantee for the future. But in our view, the time has come now to invest cheap in silver or to swap from gold to silver and to wait for the opportunity of swapping (back) from silver to gold at a convenient moment. This could be suitable for those who would like to participate in this strategy, have no sufficient amount (yet) for the purchase of real estate and can put some money aside without needing it for any other investments in the next months.
Real estate purchases can also be a perfect option nowadays. With the right location of your real estate and a long-term investment horizon you cannot lose. But real estate requires a certain amount of money while you can start with precious metals from one single EUR/ USD/ GBP/ CHF onwards if registering with our partner. On top, you can enjoy additional benefits as the customer of Singabiz registering via our link.
For those who would like just to protect their savings from potential inflation or put their money after sales of stocks into a more secure haven waiting to re-invest into bullish stock markets, gold could be a good alternative.
Singabiz can help you with both options: real estate in the best profitable and secure markets with top ROI (return on investment) as well as precious metals. Feel free to contact us or to book a consultation directly.
