Investing

The large gap between the price of copper and U.S. indices is a warning sign that investors should take into consideration before starting new positions. Here's why.

Dividend Paying Stocks are Not a Safe Substitute for Bonds! Ever! DIVIDEND PAYING STOCKS ARE NOT A SAFE SUBSTITUTE FOR BONDS! EVER! EVER! Did I write that big enough? Maybe not. Let’s try again: DIVIDEND PAYING STOCKS ARE NOT A SAFE SUBSTITUTE FOR BONDS! EVER! EVER! Here's why.

While the correlation between bonds and stocks tends to increase during economic turmoil, gold usually becomes negatively correlated with other asset classes in such times. This means that the diversification benefits of gold are maintained and may even increase in during severe crises. Let me explain further and provide some caveats.

Instead of obsessing over the timing of eventual interest rate hikes to contain inflation, it may be more useful observing the slope of the yield curve to see where the economy and the stock market are headed.

The HUI Gold Bugs index has fallen twice as much as gold’s bear market loss of 43% but, looking at the charts, both are saying the lows may already be in.

On the very last day of the last two Shemitah years, the stock market crashed so badly that it set a brand new all-time record and now we are in another Shemitah year. It began last fall, and it will end next September. Could it be possible that we will see another historic market crash?

When comparing the S&P 500 to the Barron's Gold Mining Index (BGMI), the ratio reached a high of 6.32 during the 1987-2000 bull market. The ratio today is 6.39. The higher the ratio, the cheaper gold companies are which means...we are seeing the cheapest gold stocks ever!

The market's history often provides clues to its future - we're big fans of precedent analysis - so now's a good time to delve into prior, similar instances to see what they led to [and, therefore, what we might expect in the next 2 months].

The bear market for gold is long in the tooth...and gold stocks are the most undervalued they have been in decades.

Where do we go from here? I can promise you, it's only going to get worse! Like our economy, there is clear seasonality when it comes to stocks. Trends flesh out overtime. It's not random. From that data, I want to give you a picture of what the next few months might look like.