Dave Ramsey claims regarding gold are very misguided.
Let’s start with his belief that gold is more volatile than the stock market.
We are going to show you that that claim is false. Gold actually has less volatility.
Furthermore, when the stock market has dropped rapidly, gold has responded with a well-appreciated increase in price for those that diversified into gold.
Here are some examples from the past 30 years.
Over 18 months from September 7, 2007 to February 13, 2009 the S&P 500 dropped nearly 43% from 1453 to 831 points. That’s a very rapid drop that doomed the portfolio of many people. Gold responded by increasing 29%, going from $687 per ounce to $974 an ounce in that same time span.
We saw the exact same dynamic in 2019.
Over four months from December 19, 2019 to March 20, 2020 the S&P 500 dropped 26% from 3206 to 2375. A 26% drop within a narrow time frame is frightening. Gold responded by moving from $1477 on December 16, 2019, to reaching an all-time high of $2018 on August 3, 2020. This “yellow rock” paid off handsomely to those that diversified into gold by increasing 37% in nine months.
These increases in the gold price came in direct response to the stock market going backwards. Instead of telling his followers not to put anything into gold, Dave Ramsey should be imploring all stock market investors to hedge with gold!
In contrast to the stock market, gold has shown very little volatility.
The most dramatic change for gold was over 21 months from September 2, 2012 to June 3, 2013 when the spot price dipped 9% from $1,528 to $1397. This was after the Federal Reserve began to print exorbitant amounts of money to stop the bleeding from the Great Recession.
Gold is the perfect diversifier for stock market investors!
Ramsey and the anti-gold crowd like to contrast the stock market’s performance with gold’s performance. This is misguided thinking. Gold’s best attributes is that it is outside the banking system, it is liquid, tangible, and outperforms inflation. History has proven that it is wise to hold cash in the form of gold. Those are the primary reasons that you we need gold. The fact that gold’s performance is worthy of comparison with the S&P 500, which is the most successful stock index in the world, is the fifth benefit that speaks to gold’s value.
Why do you think that the central banks of the world are right now buying gold at a record pace?! They know that the system is likely to breakdown soon and be rebuilt. The central banks know that the only way to build confidence in the new system is to back it with gold. It is time for you to become your own central bank and acquire gold!
Don’t adopt Ramsey’s dismissiveness towards gold, he is as wrong as two left shoes. Americans should definitely use gold as a diversifier, and also use it as an antidote for the impact that inflation is having on your savings. True inflation right now is well over 5%, but the banks give you less than 1%. Since gold historically outperforms inflation, use gold to store your wealth.
By using gold to become your own central bank, you don’t have to concern yourself with counterparty risk like you would at Wells Fargo, Robinhood, or Silicon Bank. Globally, gold has no rival in terms of liquidity. In the USA, the dollar is gold’s only competitor in terms of liquidity. You can pick up your gold bars or coins and take them anywhere in the world you want. You’ll also be able to liquidate them at a published price.
Gold is discreet, mobile, and outperforms inflation.
So, the question is not “should I buy gold or stocks”? At this time in history your question should be, how much in stocks or cash should I get over to gold right now!?
Ramsey discourages his followers from acquiring gold, claiming that there is nothing magical about it:
Then why are the central banks of the world buying gold at a record pace right now? Many market analysts and fund managers, like Ray Dalio, are sitting on the sideline with cash in anticipation of a stock market collapse. The Federal Reserve can no longer hold off rampant inflation by raising interest rates. For those reasons, gold is only a few sunrises away from a fierce rally. Unfortunately, it will be in response to a stock market collapse. Insiders already know this.
If you would like a little bit of insight on acquiring gold, silver, or platinum give us a call at 800-960-6280. Visit our website at www.thegoldmarketplace.com. Buying packages is a great way to get low premiums.