Are we at the beginning of a bear market or is this just a simple correction? In this program of Daily Market Insights, Patrick Brunson talks about the latest stock market trends and precious metals as a form of wealth insurance.
Are We at the Beginning of a Bear Market? Video Transcription
Patrick Brunson: 00:00
Good morning and thank you for tuning in to daily market insights. This week we've been seeing a lot of stuff within the markets take place that we're not really used to. We've seen the stock market extremely volatile. In fact, we entered back into correction territory last week on Thursday and Friday when the market dropped several points within those two trading days and officially we're now back into correction territory. We saw the market try to make its way back up and gain some more ground and rally on Monday and then turn around and gave those points back yesterday. Today we're down about 50 points after the open about an hour ago, so the market's in correction territory. A lot of people at this point are trying to figure out what they want to do. They've already lost a little bit, but not all of their profits that they may have made back from 2007 and 2008.
Patrick Brunson: 00:57
They're on the fence as to what they want to do with their stock portfolio. They call their broker and of course their broker talks them into keeping it. “It'll come back, it always does, it comes back every single time”. So it kinda keeps them back in a position where they can maybe wait and see what happens. The problem is is that these situations happen all the time. If you look at 2007 and 2008, the market reached its peak in October of 2007 of over 16,000 points. That's when the market correction or the 08 financial crisis started because we saw the stock market drop more than 2200 points in about four months after that. And then following the next year, we saw the market drop over 9,000 points and bottoming out. But it was over the course of about a year to a year and a half that had happened. Well, stock market crashes don't necessarily happen in just one day.
Patrick Brunson: 01:55
A bear market is a long drawn out process and how it typically works is you see real big up days, but you see several down days. So these updates make us think that, oh, maybe the stock market's coming back, but they're followed by three or four or five down days of two or 300 points. So that's the key thing here is recognizing the trends. If you look at the last 60 days, the market has dropped more than 2,400 points. So if you look at it, the actual performance on a chart, it appears that we have entered a full blown bear stock market. So we got to really, really figure out what direction we're going to go towards when it comes to our portfolios and how we can protect ourselves because you know, most people when we see a stock market correction like we saw in 2008 most people- they can't come back from a hit like that.
Patrick Brunson: 02:54
I mean we saw some people lose 40 50 60% of their liquid net worth because they held out, because the broker told them it would come back. It took them several years to make it back. But do we really want to go through that entire cycle all over again? So the biggest question is how. How do we protect ourselves? Well, traditionally safe haven assets is what people lean towards. The only areas that stock brokers typically move their clients' money from is you know, stocks over into bonds. It's a safe haven asset. It's done that- been that way traditionally for a very long time. But the other asset that people can move towards is precious metals. It's a private asset that you hold physically in your hand, in your safe at home or in a safety deposit box at the bank. It's a private asset that you benefit from and no one else, it's an asset that tends to zig when everything else zags.
Patrick Brunson: 03:50
It's going up when everything else is dropping. This is the one area where if you had the right percentage of your portfolio protected in gold back in 2008, you would've actually made money. Gold increased more than 200% during the 2008 financial crisis. And over the last year since the dollar's been dropping, we've seen gold move up more than 14%. so at this point, this is what a lot of people are trying to get the answer as to what they need to do. And your broker is going to tell you to hang on. They always do. That's their job. And that's okay. But you have to make the decision to move money into an area that no one else benefits from except you. Your broker will never tell you to move money into physical gold if he's not going to benefit from it. Some may, but most won't.
Patrick Brunson: 04:41
So with that being said, you have to make the decision to be able to make that move yourself. And that's where a company like U.S. Money Reserve comes into play because we specialize in building precious metals portfolios that are tailored to fit your financial needs. So if you're looking for a real form of protection from this bear market that may last another year, you can call us at the number listed on your screen and we can help you out in getting started with a precious metals portfolio. With that being said, you can also get your copy of the fiscal states of America. This tells you what's happening in your state and within your economy that affects you directly as well. So with that being said, keep your eye on the markets, but keep in mind when it comes to precious metals, it's insurance on your portfolio and you do not wait to buy it.
Patrick Brunson: 05:33
You have to be proactive and not reactive. You don't wait until your house is on fire to run down to state farm and put insurance on it. You have to do it ahead of time. So call us, let us know what you need and we'll be here to help you out in any way that we can. If you have any questions in regards to the topics that we've been discussing, put it in the comment section below or reach out to us. For today, that's all. Thank you for tuning in to daily market insights.