Gold mining shares have been a terrible investment over the past 5 or so years.
But is that about to change?
Read on for why now might be a very good time to consider adding them to your portfolio…
By Justin Spittler
It’s official: gold is in a bull market.
Dispatch readers know gold has exploded higher this year. It’s already up 18%. Yesterday, gold hit its highest level since February 2015.
Gold has now climbed 21% since hitting a seven-year low in December. According to the mainstream definition, a bull market starts when an asset rises 20%.
• Investors plowed $7.8 billion into gold exchange-traded funds (ETFs) last month…
That’s an all-time record, according to Barron’s.
So, what’s causing this rush into gold?
As regular readers know, gold is money. It’s a safe-haven asset that’s held value for centuries. It’s protected wealth through the worst financial crises in history. In short, investors buy gold when they’re nervous.
• There’s plenty to be nervous about right now…
Stock markets are struggling this year. The S&P 500 has dropped 3%. The tech-heavy NASDAQ has fallen 7%. The STOXX Euro 600, which tracks 600 large European stocks, has fallen 7%. The Japanese Nikkei 225 has dropped 12%.
The global economy is looking shaky. The U.S., the world’s largest economy, is having its slowest economic “recovery” since World War II. China, the world’s second-biggest, is growing at its slowest pace since 1990.
World governments are using radical monetary policies to stimulate their economies. They’ve borrowed trillions in new currency units. They’ve printed trillions more. Their latest scheme is negative interest rates.
With negative interest rates, your bank doesn’t pay you interest on your savings. Instead, you pay interest on your cash. It’s a bizarre, upside-down policy that could only exist in a world controlled by government bureaucrats.
The government thinks negative rates will boost the economy by encouraging more borrowing and spending. But Casey Research founder Doug Casey explains why the government is wrong.
It’s part of the Keynesian view, in which spending and consumption drive the economy. This isn’t just wrong, it’s the exact opposite of what’s true. It’s production and saving that drive an economy. You have to save to build capital, and capital is necessary for…everything. What these people are doing is destructive of civilization itself. And when we go into the next crisis, governments will use the disastrous results of their own policies as excuses to enact even more destructive versions of the same things.
• Like most commodities, gold is cyclical…
It goes through big booms and busts. Gold has dropped 33% since 2011…but it appears to be entering a new bull market. Gold rose 640% during its last bull market.
We believe everyone should own physical gold. Gold is insurance against government stupidity. As we’ve explained many times, world governments are conducting a grand experiment with our money.
Doug Casey says these reckless policies will make the next crisis “much worse, much different, and last much longer than what we saw in 2008 and 2009.”
• If you’d like to profit on gold, consider buying gold stocks…
Gold stocks offer leverage to the price of gold. A 10% jump in the price of gold can cause gold stocks to surge 20%…30%…or even 50%.
Gold stocks are soaring right now. The Market Vectors Gold Miners ETF (GDX), which tracks large gold stocks, is already up 48% this year. And we think this rally is just getting started.
However, gold stocks aren’t for everyone. Small gold stocks can rise 30% or more in a day…and fall just as quickly. But if you can stomach the volatility, gold stocks are one of the only sectors where you can multiply your money by five times or more very quickly.
• Louis James, editor of International Speculator, expects much higher gold prices…
Louis is our gold stock expert. He travels the world, visiting small gold mines and looking for the best stocks for his subscribers.
Louis says this is the best time to buy gold he’s ever seen.
Today, we’re coming off the longest and most devastating gold bear market in the past 40 years. With valuations near extreme lows, small gold stocks are like coiled springs, ready to leap higher. Now is the best time I’ve seen since I started this business to position yourself for potential 10-baggers (1,000% gains).
Opportunities like this don’t come around often. Once gold stocks take off, we probably won’t get another chance this good for at least five years. That’s why we’re offering a special deal right now. For a limited time, we’re offering a subscription to Louis’ International Speculator for $500 off the normal price.
If you join, you’ll get immediate access to our new report, 9 Essential Gold Stocks to Buy Right Now. In this report, Louis reveals his top picks that could gain 10x, 20x, or even 30x during a gold bull market. Those gains might sound unbelievable…but they’ve happened before.
• Moving along, our technology guru Chris Wood sees a big opportunity…
If you don’t know Chris, he takes a “venture capital” approach to tech investing. He looks for small companies on the cusp of a big breakthrough. Right now, one of Chris’ favorite sectors is self-driving cars.
• The self-driving car market is exploding…
Self-driving cars could eventually prevent hundreds of thousands of fatal car accidents per year. The potential for this technology is huge.
Allied Market Research expects the market to grow at a compound annual growth rate of 23%. That’s ten times faster than the U.S. economy has grown since 2009. Self-driving cars should be a $60+ billion market by 2020.
Huge companies are pouring money into self-driving car research. German carmaker Audi plans to spend $30 billion over the next five years to develop self-driving car technology. Japanese carmaker Toyota announced in November that it will spend $1 billion researching artificial intelligence and robotics for self-driving cars.
• In January, Elon Musk said “you’ll be able to summon your car from across the country” in two years…
Musk is the founder and CEO of Tesla Motors (TSLA), an electric car company pioneering self-driving technology.
While Chris believes the potential for self-driving cars is huge, he says Musk is exaggerating here. Self-driving cars still have to overcome some big obstacles before you see them in your neighborhood.
• One of Google’s self-driving cars crashed last week…
Bloomberg Business reported:
An autonomous vehicle being tested by Google hit a bus earlier this month, the first time the company said its self-driving technology is partly to blame for an accident.
The car, a Lexus sports utility vehicle, hit the left side of a public transit bus as it was attempting to avoid some sand bags on a road in Mountain View, California.
Chris says this was bound to happen.
The industry still has to work out a lot of kinks before self-driving cars go mainstream. The software can’t be buggy. It can’t freeze or crash. Even small glitches are unacceptable, since a glitch at 70 mph can kill people.
Many of the sensors in today’s self-driving cars don’t work well when it’s foggy, raining, or snowing outside. Mapping technology also needs to improve a lot.
Self-driving cars have to be so safe that you would let one take your eight-year-old daughter to school. I don’t see that happening soon.
Like any technology, self-driving cars will take time to mature. However, investors can still make money investing in the technology behind self-driving cars…
There will still be plenty of opportunities in the years to come to invest in companies advancing self-driving car technology. GM, BMW, Mercedes…they’ll all continue to sell cars. This bodes well for innovative companies that create and improve this technology. And there are a lot of companies like this out there right now.
Chris recently examined the self-driving car industry in Extraordinary Technology. He discussed eight companies he’s watching in the space. You can invest with Chris by signing up for Extraordinary Technology.
When you sign up, you’ll also learn about Chris’ newest investment recommendation. He calls it the “safest opportunity to make 100%+ gains [he’s] ever seen.” Click here to learn more.
Chart of the Day
Gold stocks are rocketing higher…
Today’s chart shows the performance of the Market Vectors Gold Miners ETF (GDX). As we mentioned, GDX tracks large gold mining stocks.
GDX has gained more than 40% this year. Yesterday, GDX closed above $20 a share for the first time since May.
If gold keeps rising, GDX will likely go much, much higher. It’s not uncommon for gold stocks to rise 200% or more on average during a gold bull market. And the very best gold stocks can surge more than 1,000% in just a few years.
As we mentioned yesterday, Doug Casey recently bought $1.5 million worth of gold stocks. If you’d like to invest in gold stocks along with Doug, check out our special offer on International Speculator. At $500 off the regular price (plus a 90-day risk-free trial period), there’s never been a better time to learn how to speculate in gold stocks. Read more here.