Gold & Real Estate Value Cycle

It is impossible for anyone to time financial markets. Deciding when to buy and sell often becomes an emotional decision because even the most skilled economists can only speculate what the future holds. This is one of the major reasons why we encourage our advisors to equip their clients with wealth insurance – an educated investment in physical gold and silver to operate as a hedge against market volatility. As investors we, of course, strive for the best possible outcome when it comes to our finances, but sometimes the worst outcome lands.

Our team created an illustration that shows the best-case scenario of what gold and silver can do in under 100 years. Our Gold & Real Estate Value Cycle illustration shows our subject “John” selling his house in the 1920s for $3,000, and buying 150 ounces of gold. John then sells his gold when it peaks so he can re-invest in real estate. John continues this simple cycle over the next 80 years, timing each market peak perfectly, and by 2000, John owns 24,000 ounces of gold – worth over $30 million today.

The illustration doesn’t stop there. John keeps his perfect streak alive, selling his gold again at the peak in 2011 and immediately buying real estate. By 2011 John owns 160 homes. John turned $3,000 into $48 million in 91 years, which is a 1,599,900% increase, or 17,581% increase annually. With market forecasts of future pullbacks, this trend would continue exponentially beyond the scope of these numbers. But one can only speculate.

Again, I will say that it is impossible to predict the top of any given market, but this shows the cycle that markets tend to take. The message is: gold acts as a counter balance to equity markets and real estate markets, to name two, and plays a very important role in a financial portfolio. Do not allow your clients to go without a market hedge in their portfolios. Looking objectively, real estate prices have surpassed levels last seen in 2007 making them all-time highs. Utilizing this information, we can formulate gold and silver are extremely undervalued.

Equally as important, do not let your clients be fooled by fancy marketing or telemarketers. There is a right and wrong way to buy and own gold and silver. Contact us today to learn more about wealth insurance and how to protect your clients’ wealth in times of volatility.