We’re only in February of 2020, and already the year’s news cycle has been host to warnings of weather-related natural disasters, threats of pandemics, and ever-expanding global turmoil. Great swaths of the Australian continent remain on fire because of out-of-control blazes. The damage caused by these wildfires has been greatly exacerbated by destructive flooding in the country as well. Puerto Rico has suffered a series of intense earthquakes, not even three years after Hurricane Irma devastated the island nation in 2017. While Puerto Rico and Australia seem relatively far away, others in the world who are not directly affected by those countries’ disasters are fretting over the threat of impending doom from a different source: COVID-19, the recently named coronavirus. The outbreak and spread of the novel coronavirus from Wuhan China has now surpassed the SARS virus in lives claimed. Just over a hundred years after the infamous deadly Spanish flu, the world is facing the rise of another potential pandemic.
As anyone with internet access can tell you, we are living in tumultuous times. There is an ironic English saying that comes from a Chinese curse: “May you live in interesting times.” To better define the irony of this phrase, see what German philosopher Georg Wilhelm Friedrich Hegel had to say about the role of happy times in history: “World history is not the ground of happiness. The periods of happiness are empty pages in her.”
What Hegel is saying is that history, or “the times,” is rarely defined by prosperity and peace. For better or for worse, human consciousness is not oriented around memories of the good. It is best practice to prepare for the worst in all eras of life, but 2020 is proving to accelerate the need for nimble-footed readiness.
The truth we must all face is that, in times like these, it might not always be good enough to have your health and shelter. Not only are lives and ways of living threatened, but the world economy is threatened as well. Pandemics and natural disasters disrupt societies, and such disruptions tend to adversely affect the economy. Therefore, many people will flock to safe-haven assets when the world seems at its lowest. Safe-haven assets generally include gold and other precious metals. Trusted industry leaders such as U.S. Money Reserve offer government-issued and -backed gold coins, which may be among the assets sought after when attempting to diversify one’s portfolio.
We can already see this safe-haven trend as a reaction to the coronavirus outbreak and spread. Gold and other precious metals have seen a boost in demand since the outbreak. Goldman-Sachs issued a recent report that appears to suggest many holders are diversifying their portfolios with new physical gold purchases, including bullion, coins, and bars. Along with the report, Goldman-Sachs also raised its target price for gold up to $1,600 per ounce.
Heritage Capital, however, didn’t stop there, suggesting an even more liberal valuation for gold to come this year. The firm estimates gold prices in 2020 to range between $2,500 and $3,000 per ounce. Other firms, such as Altavest and Bridgewater Associates, have projected gold per ounce prices to increase to $1,650–1,750 and $2,000 respectively. One thing most of these expert firms can agree on, however, is the reason why the economy is likely to see increased gold values: global uncertainty.
A term mentioned above that begs a more detailed explanation is “diversifying.” What does diversification mean, and why do holders seek to diversify more during tumultuous times? To answer the latter first, a diverse portfolio brings holders peace of mind in uncertain times. Simple as that. To address the first question—what is diversification?—let us start by specifying the true nature of what we mean when we say diversification. Principally, a diverse portfolio is a well-balanced portfolio.
To put the potential power of a well-balanced portfolio in context, consider a number of projections: Income inequality, according to the Gini index, is at its highest level in the last 50 years; last August, a survey conducted by the National Association of Business Economists resulted in a staggering 72 percent of the economists polled predicting a possible recession come 2021’s close; and finally, many gold experts agree that gold values may rise. Taking these three projections into account, it seems fair to assume that, should the predictions come to pass, gold could act as a kind of shield against the duress of economic recession and inequality.
Holders interested in diversifying their portfolios may be interested in purchasing gold coins offered by U.S. Money Reserve. U.S. Money Reserve offers an array of government-issued coins. Qualified purchases are protected, and to date, the company has served more than 500,000 clients. Philip N. Diehl serves as President of U.S. Money Reserve, making it the only gold company led by a former U.S. Mint director. U.S. Money Reserve’s authority and expertise on gold have built lasting trust in an often challenging industry.
About U.S. Money Reserve
U.S. Money Reserve is one of the largest distributors of precious metals and government-issued coins in America. The company is the only gold company led by a former U.S. Mint director, President Philip N. Diehl. U.S. Money Reserve has helped hundreds of thousands of buyers and holders make decisions about gold, silver, and platinum over the years. Knowledgeable Account Executives apply their years of experience to evaluate buyer goals and objectives, helping you make the right decisions for your portfolio.