The Cruelest Month
April, says the famous poem The Waste Land, is the cruelest month. But May was pretty tough on the top-heavy stock market, as we had warned. (See here, here, and here.) The Month of May was cruel to investors.
Both the Dow Industrials and the S&P 5oo lost six percent in May. The Nasdaq fell about eight percent.
What happens when a market falls? What does it take to restore your position? This is a very important consideration and one of the reasons we have been advising you to seek safety in gold.
Let me give you an example. Suppose a stock index you have invested in is at 10,000 points. If the market falls 20 percent, your index is now worth 8,000. That is straight forward, right?
So, you need the market to bounce back up 20 percent to be made whole again, right?
No. Wrong.
At the new price of 8,000, if the index climbs a full 20 percent, it is now worth only 9,600 points
The market fell 20 percent. But then in climbed 20 percent back up. Yet you are still down four percent.
And that is crueler than any month.
In fact, you need the market to climb 25 percent just to break even!
That is why we warn so repeatedly that in this environment of an obviously top-heavy and wobbly stock market, it is better to sit out the game.
Don’t forget for an instant that last fall the S&P 500 dropped 25 percent in just 64 trading days! And when a market falls 25 percent like that, it has to climb back up 33 percent just to get you back to break-even!
That’s a pretty steep climb!
The safest place to sit out the risky stock market game in an era of trade and currency wars, unpayable government debt, and reckless money-printing, is gold.
Contact RME Gold to learn more. Simply call our office and you will be connected to one of our knowledgeable gold and silver professionals.
Today we have a rare and potentially extremely profitable opportunity for our friends and clients.
