A rising tide lifts all boats, it’s said. The stock market washout of the past week also proves the opposite is true in times of intense investor fear like now.
Shares of all shapes and sizes are being hammered, as I type. Worsening risk aversion is whacking the prices of terrific stocks, along with some genuine duds. Even classic defensive companies are suffering amid the gloom.
It may seem like financial apocalypse to some investors. But short-term volatility is part and parcel of share investing. The important thing is not to panic. My own stocks portfolio is also taking a heck of a beating today. My belief in the long-term outlook for these shares remains undimmed. And so I’m happy to hunker down and continue holding them.
Safe-havens are growing in popularity
It does pay to be reactive in tough times like these though. The spread of the coronavirus has supercharged demand for safe-haven assets like bonds and gold. With the news flow worsening — French premier Emmanuel Macron described the outbreak today as a “crisis” and “an epidemic that is on the way” — getting exposure to these so-called flight-to-safety assets could prove to be a shrewd move.
Sales data from The Pure Gold Company today illustrates the strength of bullion buying at the current time. Gold bar and coin sales during the past seven days has rocketed 723% versus the weekly average of the past 12 months, the retailer says. Uptake has been so strong, the company’s had to extend its opening hours to 10pm, it said.
Gold touched fresh seven-year highs of around $1,675 per ounce earlier this week. And the comfort blanket metal looks far from done. More gains could be built on those growing tensions surrounding COVID-19. Prices could also rise should central banks be forced into more stimulus to offset the economic impact of the virus. Loose monetary policy has already been a significant driver of gold prices during the past 12 months.
A top buy today
Buying gold, gold-backed financial instruments, or shares in gold-producing stocks, would appear a good idea at the current time. And one good way to currently protect your financial health would be by buying shares in FTSE 100 gold digger Polymetal International.
The price action of today illustrates just why. The broader blue-chip index continues to plunge and, in Thursday business, finally fell below the critical 7,000-point marker to its cheapest since last January. Russian digger Polymetal, by comparison, was last dealing 1.2% higher on the day.
It’s now just a whisker off Monday’s closing record peaks of £13.45 per share and its low valuation gives it plenty of scope for more strength. Right now, it trades on a P/E ratio of around 11 times for 2020. It carries a market-beating 4.6% dividend yield too.
Those investors fearing the worst could do well to buy shares in this safe-haven hero.
It’s official: global stock markets have been on a tear for more than a decade, making this the longest bull market in history.
But this seemingly unstoppable run of success poses an uncomfortable question for investors: when will the current bull market finally run out of steam?
Opinions are split about whether we’re about to see a pullback — or even a bear market — in 2020. But one thing is crystal clear: right now there’s plenty of uncertainty and bad news out there!
It’s not just the threat posed by the coronavirus outbreak that could cause disruption — Trump’s ongoing trade-war with China and the UK’s Brexit trade negotiations with the EU rumble on... and then there’s the potential threat of both the German and Japanese economies entering recession...
It all adds up to a nasty cocktail with the potential to wreak havoc and send your portfolio into a tailspin.
Of course, nobody likes to see the value of their portfolio fall, but fortunately, you don’t have to go it alone. Download a FREE copy of our Bear Market Survival Guide today and discover the five steps we believe any investor can take right now to prepare for a downturn… including how you could potentially turn today’s market uncertainty to your advantage!
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.