More and more people are finding out that it’s possible to rollover your 401k into a gold 401k. With the current geopolitical concerns, world economic concerns, and overvaluation in the stock market, I can understand why this concept is becoming more and more attractive.
Today, we’ll talk about the issues mentioned above and why taking advantage of a gold 401k rollover may be a great idea. So, let’s get right to it.
One of the biggest factors causing concern over the stock market’s ability to continue on the upward trend it’s been on for years is the current geopolitical climate. The harsh reality is that in times of geopolitical unrest, the stock market generally reacts in a negative way. Unfortunately, we’re experiencing quite a bit of geopolitical blues right now. Starting off, Russia invaded the Ukraine owned Crimea Peninsula a few months ago and still refuses to leave. As a matter of fact, western countries have sanctioned Russia for their actions in the conflict; to which Russia responded by refusing even more trade. Aside from Russia, terrorist organizations like ISIS and Hamas are plaguing the Middle East; forcing intervention from the United States.
World Economic Concerns
The state of the world economy plays a big role in our economy here in the United States and the performance of our stock market. The reality is that exports are a huge part of the continuously growing US economy. However, the world economic climate doesn’t look as good as it once did. As a matter of fact, the multi-country Eurozone is experiencing incredibly hard times; times that could lead several countries on a spiral down into a recession. As the Eurozone economy continues to worsen, major questions about the world economy are starting to arise.
Overvaluations In The Stock Market
When the stock market is overvalued, it means that investors are grossly overpaying when making investments. At some point, investors will realize this mistake and start selling to try and recover losses. As a result, a market correction ensues. Currently, the Schiller PE ratio, which tells us about the valuations of stocks in major markets, is sitting at 26.5 points; far higher than the healthy average of 16. That tells us that not only are stocks currently overvalued, but the overvaluation is hitting a crucial tipping point. If the Schiller PE ratio continues to rise, we can expect a market correction relatively soon.
Is A Gold 401K Rollover The Solution?
In my humble opinion, the answer is, “Yes”. The truth is that when the stock market isn’t doing so well, the value of gold tens to rise. That’s because when investors see losses in stocks, they start to look for safe haven investments. Gold is one of the oldest and most popular safe haven investments there are. So, investors start to sink their money into gold. As a result, supply goes down while demand goes up. So, under the basic laws of supply and demand, gold gives you a way to realize positive gains even during negative market trends.
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