Whenever there is trouble, more investors start seeking the refuge of investing in the precious metals market. There have been signs recently that this trend is occurring right now. More investors are investing in gold, other precious metals and rare coins. This is not something that normally happens when there is a bull market, which suggests that investors are hunkering down for the inevitable correction that is coming down the pipeline through the stock market.
Concerns about the Stock Market
The market has been going up steadily recently, but there was a spike in the market and a slight shift downwards. While it was only a 3.6% shift, this is an indicator of a larger problem to come.
Investment strategists always get excited about a run on the market, but it can cause concern as well. This is because any run will eventually cease. When a run ends, it is generally followed by a downward trend. This is the reason why investing in the precious metals market starts to look like a good refuge from the impending correction in the market.
Some experts are pointing to the fact that the Federal Reserve is no longer making a big push to encourage investors to make purchases of stocks and bonds. This is in addition to the fact that even foreign markets like the Nikkei have been dropping. An 18 percent drop is far more significant and means that investors have fewer places to reinvest into other than investing in the precious metals market.
Trend towards Precious Metals Value Increase
There are signs that the precious metals market will bottom out. This is because the volatility in the U.S. and Japanese markets are only two examples of how the investment markets are showing signs that they are about ready to have a huge shift. This makes the idea of investing in the precious metals market very tempting.
One sign that a correction is on the way is that a possible bubble had been forming in the housing market. Investors are once again buying and re-selling (flipping) houses. The trend has caused a fast increase in the home values. This trend has not been a smooth one, as there are still sections of the market that are dropping in value. This trend is even more disturbing because while the home prices may grow to the tune of double digits, the income growth is not rising nearly that fast.
How Jobless Rates Affect the Trend
Some investment analysts would like to point out the growth in jobs available in the country as a sign of a healthy economy. This flies in the face of the fact that the jobless rate is actually still growing. What they are not taking into account is that while there are more jobs, the job growth rate did not grow fast enough to compensate the new workers entering the market as well. It still has yet to compensate for all the people who lost their jobs from the last meltdown.
Long Term Investments Make More Sense
With all of the signs that the stock markets are becoming increasingly volatile, investing in the precious metals market looks more and more promising. Any returns in the stock market are expected to be short-term gains, which does not sit well for an aging investment demographic.
The best safeguard in a volatile market is investing in the precious metals market. Many investors are already onto this trend. Even while investing in short term investments and looking for signs of a long-term improvement in the stock market, they feel compelled to prepare for the inevitable downturn.
