Whenever you have a market bubble, the question on everyone’s mind is always the same.
Have we reached the peak yet, or will the momentum continue?
This time it’s no different.
With the stock market exploding to the upside since the start of the recession… yes, what you just read sounds ridiculous, but that’s the truth… we’re all wondering when this bubble will finally pop.
And with the price struggling to make new highs, some are already saying that this is it.
But is it really? Let’s find out.
What’s Driving The Market
Whether we’ve reached the top of a bull rally is always a difficult question.
In finance, we like to say that “tops are processes, and bottoms are events.” Meaning, timing the latter is much easier.
Take the COVID-19 crash, for example. Although the virus warning signals were flashing red since January, it took the market more than a month to finally start correcting. On the other hand, the bottom happened in an instant, triggered by the FED announcing the QE Infinity program.
So, despite all the negative news about the economy, don’t be surprised to see this market to continue climbing higher.
You should also understand the primary driver behind this rally. It’s the Fed pumping trillions of dollars into the economy, a lot of which eventually finds its way into the stock market. They’re not planning to stop anytime soon, so it makes sense for the stocks to keep pushing higher.
Where it all ends, I’m not sure. But at this point, the downside risk is just as high as the upside potential.
Meaning, investing in the stock market right now is like going into a casino or flipping a coin. Not the kind of trade you should be pursuing.
Fortunately, though, you can find quality investment opportunities elsewhere.
The first one on the list of my recommendation is gold.
I’ve been rambling about this for a while, but even with the price approaching the all-time-highs, gold is still a great asset to own.
It’s benefiting from the weaker U.S. dollar, low-interest rates, excessive money printing, rebounding jewelry demand, falling supply, and global political and economic turmoil. It’s a perfect cocktail for higher prices.
Likewise, silver looks like an excellent investment. Its price is closely correlated to that of gold.
Furthermore, silver’s price in relation to gold is near all-time lows, which is another reason why it could outperform in 2020.
The only thing you should be careful of is that it tends to be more volatile than gold. While this also gives it more upside potential, you need some more nerves to handle it.
Finally, I like Bitcoin and other cryptocurrencies in this environment.
The uncontrolled and excessive money printing has re-sparked the public interest in alternatives to the current fiat-based monetary system. Bitcoin, being a decentralized currency in limited quantity, looks like the best solution.
Moreover, after a prolonged bear market and correction period, cryptocurrencies are now on the cusp of entering a new bull market. If this happens, Bitcoin could easily shoot to $40,000.
I’m preparing a special report on this topic as you read this, which I will release to my True Retirement Wealth subscribers in about two weeks.