On the surface, the stock market seems to be doing well. But if you’re like me and tend to keep an ear to the ground, you’ll know that several prominent experts think the current market cycle is headed for a potential correction—which would make now the time to take action and protect your portfolio.
Billionaire hedge fund manager David Einhorn says that the stock market is currently “overvalued.”
David Einhorn, who runs the hedge fund Greenlight Capital, wrote in a weekly newsletter to clients that the stock market is more overvalued than at any time since the firm’s founding in 1996, noting that “even non-tech stocks [are] trading 30 to 50 times earnings,” according to Markets Insider. Einhorn pointed to Warren Buffet’s history of pulling out of the market when earnings outweigh prices, saying, “It is therefore noteworthy to observe that Mr. Buffett is again selling large swaths of his stock portfolio and building enormous cash reserves.”
What makes Einhorn’s commentary more impactful for me is that he isn’t a lone voice in the wilderness. Similar analyses are now finding their way to financial headlines.
Economist and risk expert Nassim Taleb says stocks are the most vulnerable they have been in 20 years.
Like Einhorn, Taleb also sees the size of stock prices as cause for concern. In an interview with Bloomberg, Taleb said, “My focus would be more on being hedged against an eventual market collapse because we’re more fragile than we were probably at any point in the last 20…if not…30 years.” Taleb cited high stock prices, U.S. debt, and the ability of geopolitical shocks to affect markets as factors adding to market vulnerability.
Those familiar with our free special reports and other educational materials know that U.S. Money Reserve’s research team has also cited some of these same factors as reasons governments and consumers alike have been seeking out safe-haven assets, including physical gold.
The potential instability of the stock market underlines the benefits of owning safe-haven assets like gold and silver.
If markets are headed for dark days, having wealth insurance in place now could make all the difference. Gold can act as a hedge against market shocks as well as factors like geopolitical instability and a falling dollar—factors which have also helped push physical gold to repeatedly reach new all-time highs over the last 12 months. With gold as part of your portfolio, you may not only protect the savings you’ve worked so hard to build, but also grow your wealth in the process.
