A man wrote an article about how the stock market might not fall by half and gold won't help you if it does. He also talked to someone who looks at how markets work and that person didn't think the stock market would drop that much this year. So, he says people shouldn't worry too much about their money in the stock market. Read from source...
- The title is misleading, as it implies that gold won't protect you if the S&P 500 crashes by 50%, which is unlikely. However, the author does not provide any evidence or reasoning to support this claim. He simply assumes that a 50% crash is possible and that gold would be ineffective as a hedge.
- The author cites Wealthion's interview with market technician Chris Vermeulen as a source of information, but he does not explain why Vermeulen's prediction of a global market correction is relevant or credible. He also does not mention any other experts or data to support his argument.
- The author admits that he was ready to argue against the idea of a 50% market crash, which suggests that he is biased and has an agenda. He is trying to persuade the reader to invest in something else instead of gold, but he does not provide any alternative or better option.
- The author uses emotional language such as "Raising the possibility of a 50% market crash always grabs attention", which appeals to fear and uncertainty among readers. He also uses vague terms such as "benefit of holding gold in a portfolio" without defining what he means by benefit or how gold would perform in different scenarios.
- The author does not provide any historical evidence or statistical analysis to back up his claims about the performance of gold and other assets during market crashes. He also does not address any potential risks or drawbacks of investing in other alternatives, such as inflation, volatility, liquidity, etc.
The article suggests that there is no imminent risk of a 50% crash in the S&P 500, as market technician Chris Vermeulen does not predict such an outcome. However, if such a scenario were to occur, gold would not be a reliable hedge against losses. Instead, the author recommends investing in Orla Mining (AMEX:ORLA) and SPDR Gold Trust (ARCA:GLD).
Some possible risks of these investments are:
- Orla Mining is a small-cap company with a market capitalization of around $180 million, which makes it vulnerable to price swings and liquidity issues. Additionally, the company operates in the gold mining industry, which is subject to volatile metal prices and environmental risks.
- SPDR Gold Trust is an exchange-traded fund that tracks the performance of physical gold bullion. While it provides exposure to gold as a diversification tool, it also charges fees and expenses that can erode returns over time. Moreover, the ETF may not accurately reflect the spot price of gold due to factors such as premiums or discounts in the market.
- The S&P 500 is a broad index of U.S. stocks that represents a large portion of the global equity market. A significant decline in its value could have serious consequences for investors, especially if they hold other risk assets such as gold or Orla Mining. Furthermore, the index may not capture the full extent of potential economic and geopolitical risks that could affect the markets.