As COVID-19 slowly spread across the globe, I was getting worried about the markets...
Readers caught on quickly to my concerns, asking me if it was time to cash out of the market. I started warning folks that it was time to get defensive. Don't cash out, but prepare your portfolio for the worst.
And plenty of you were shocked. If you're a longtime reader, you know that I've been optimistic about the stock market for years.
The stock market is the greatest wealth-building tool in all of history. You need to have your money in stocks.
But I'm seeing plenty of warning signs of a coming downturn. And I continue to tell folks to get ready for a major correction.
Does this finally mean I've become a bear?
Well... It's complicated.
And it's why I urge you to join me next Tuesday, September 28. That's when I'm joining forces with Dr. Steve Sjuggerud and Dan Ferris to deliver you the investing story no one else is telling.
It has to do with the greatest threat to your wealth in the final weeks of 2021.
While we don't all agree if it's time to be a bull or a bear, there is one step we ALL agree you should take with your money right now to prepare for the difficult days ahead.
Plus, if you register now, we'll send you a free special report, The 7 Most Overvalued Stocks in the World Today.
Now is the time to take a long, hard look at your portfolio
Are you a bull or a bear? Let us know... [email protected].
Now let's dig into this week's Q&A...
Q: Roundup has been found in wild Pacific fish. It is used with GMO crops to control weed and I am told vineyards use Roundup too. So, my question is: should we only consume non-GMO food and wines? How much of a hazard is GMO products to humans? I know dogs get sick from eating vegetation sprayed with Roundup and that their feet can absorb it. The real concern: has the human food chain been corrupted? – J.L.
A: Genetically modified organisms (GMOs) are organisms that have had their genetic material changed using genetic engineering techniques. The most common examples are seen in crops like corn, soybeans, and tomatoes (even salmon) that are "Roundup ready." That means their genes have been altered to make them resistant to the weed killer glyphosate (the main chemical in Roundup herbicide). So when farmers spray Roundup, it kills the weeds and not the crops.
In addition to herbicide protection, some GMO crops are protected from insects, diseases, and pesticides. That leads to improved crop yields and more consistent crop quality. But GMOs attract a lot of controversy. Some people claim they have less nutritional value and have led to an increase in the use of herbicides and pesticides. There are also theoretical dangers to humans.
The controversy regarding GMOs hit a high point in 2012, when a study was released showing pictures of rats with bodies filled with tumors... supposedly the result of GMOs. But the study was retracted a year later.
I'm not saying GMO foods are good or bad... The science and research on both sides of the GMO debate are equivocal at best. Until conclusive evidence shows that GMOs cause harm to humans, I won't go out of my way to avoid them.
But we do know there are risks to using Roundup on crops. The main ingredient, glyphosate, interferes with hormones and certain chromosomes in animals and could harm humans as well. Worse, studies show that when it's combined with the other chemicals in Roundup, glyphosate is toxic to humans. The few studies available show that it is a factor in nonalcoholic fatty liver disease.
In 2019, a man named Edwin Hardeman was awarded $80 million in a lawsuit claiming he developed non-Hodgkin's lymphoma after using Roundup. A San Francisco jury found chemical company Bayer's Monsanto unit, which produces the herbicide, liable because it didn't warn consumers of Roundup's alleged risk of causing cancer. Bayer appealed the verdict, but in May of this year, a judge affirmed the original court's decision in favor of Hardeman.
While GMOs specifically don't worry me right now, I do try to avoid pesticides. Longtime subscribers know I recommend following the Dirty Dozen list from the Environmental Working Group. If something is on the Dirty Dozen list, it's worth getting the organic version (or asking the grower about the type of pesticide they use).
Q: You mention that up to 45% of your defensive model should be in Gold. This is heavily weighted, so what are some avenues to invest in Gold rather than physical gold itself? Owning some physical gold is attractive, but this can be cumbersome for most folks in many ways and I would think should be a small amount for those that do.
I'm not interested in buying and holding too much physical gold for several reasons. So I'm looking for alternatives.
What investments are the next best thing to physical gold? Would a gold trust like CEF be a solid choice?
Your direction would be much appreciated. – L.H.
A: Right now, gold is a critical part of anyone's portfolio. As we've said for years, it's the ultimate chaos hedge. But buying physical gold has its downsides, like finding a reputable dealer, figuring out where to store it, and then accepting that gold pays no interest or income.
Physical gold is an excellent store of wealth. When things get rocky in the economy or stock market, folks turn to gold as a safe haven. It has historically held its value across borders, cultures, and political systems... in peacetime and in war.
But if you don't want to worry about where to buy and store a bunch of gold, you can turn to gold stocks.
As we said recently...
To us, gold stocks count as a chaos hedge just like physical gold. And you can go further and say they may even be a better chaos hedge than gold itself.
Gold stocks tend to amplify the move in gold. Smalls moves in the precious metal can lead to big moves in its stocks. So if we see real chaos, they could protect your portfolio even better.
If you want to add gold to your portfolio, you can buy physical gold. The quickest and easiest way to get direct exposure to the price of gold is through SPDR Gold Shares (GLD). The fund holds actual gold bullion in a London vault and tracks the price of gold well.
What We're Reading...
- The Environmental Working Group's produce-buying guide for 2021.
- Something different: Declutter your digital life.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
September 24, 2021