Loading ...Beware-stock-markets-witching-season
Below is an interesting piece from Zerohedge worth reading in full. Here are the final few paragraphs:
“2008 is a classic case in point. As we entered the Witching Season that year, gold declined along with stocks. However, following the November 2008 Lehman bankruptcy and widespread speculation that, at some point, central banks and government authorities were likely to intervene in the markets in various ways, gold began to climb again.
Gold went on to rally sharply for months before the stock market found a floor in March the next year. By that time, however, gold had regained all its prior losses, and it continued to rally thereafter.
The fact is that, notwithstanding gold’s tendency to be caught up temporarily in a general stock market correction or crash, there is not a meaningful correlation of gold to stocks over the longer term. When times are as they are today, with stock markets historically overvalued; debt and leverage ratios elevated; stagflationary forces evident; and geopolitical developments possibly making a dreadful macroeconomic situation even worse, one can justify an unusually large allocation to gold. As indeed I do.”