By Dave Forest, editor, International Speculator
You’ll want to print this essay out and keep it close by.
It may be one of the most important we’ve ever published.
In short, I’ve found a way to not only protect your wealth if the stock market takes a dive… but also a method of securing huge gains during a potential crash.
Now, every week, I speak to lots of investors. Lately, many are voicing concerns about mainstream stocks. This ranges from slight uneasiness – a nagging sense that “something ain’t right” – to full-out paranoia about a coming market crash.
As I’ll show you below, I do see signs of trouble ahead… and I’ll go over why gold bullion is still one of the best safe havens for your portfolio.
But I’ll also explain why buying physical gold isn’t the only way to protect your wealth in the months ahead. There’s another way… one 99% of investors haven’t considered. And it won’t only protect you… but it’ll also set you up for big profits.
Now, I’m a long-term investor. But I work with some of the best traders in the business, such as master options trader Jeff Clark – a man revered for his uncanny sense of market timing.
Resources like Jeff help me keep an eye on unfolding trends. One big one caught my eye recently: a “triple top” in the Dow Jones, one of the biggest proxies for the wider stock market.
Since the summer, the Dow has run to 27,400 – twice. Once in July, and again in September. Both times, it failed to break this level, and instead went lower. Take a look:
This week, it rallied to 27,400 again. And once again, it’s stalled out there.
For stock traders, this “triple top” is a searing warning signal. Simply put, when a market fails that many times in a row, investors lose confidence. A trickle of selling can quickly become a river, then a tsunami.
We got a taste of that in last December’s correction, which you can see at the left of my chart. It wasn’t that long ago.
That’s why I believe it’s critical to protect yourself right now.
To be clear, I’m not telling you to liquidate your stocks. I’m not even advising you sell a major chunk of your portfolio.
But I want you to be protected if my sources are right and a major correction – or even a crash – happens soon.
Let me explain…
Have you ever wondered how the ultra-rich protect their wealth? After all, if stocks collapse, the world’s wealthiest people face losses in the hundreds of millions or even billions of dollars.
What do they do to protect against this massive downside?
They buy gold.
As longtime readers know, gold bullion is a time-tested store of value during financial crises. It’s insurance against a stock meltdown. For proof, just look to the last major stock market crash in 2008.
After stock markets plunged 54% in 2008, gold took off. Between October 2008 and July 2011, bullion outperformed the S&P 500 by a whopping 113 percentage points.
For wealthy gold owners, that “insurance” got them through the crash. Even as their stocks, real estate, and business interests were wiped out, they cashed in on gold.
Now, as we always say, owning physical gold is the first step.
But there’s another way to use gold’s wealth-capturing power to insure your portfolio…
Better than Bullion
There’s another class of gold investments that is easy to buy, for anyone with a simple brokerage account.
Even better, these investments deliver higher returns than bullion during times of crisis.
I’m talking about junior gold stocks. You can buy shares of companies that develop gold mines. These are firms that own physical gold themselves, who do the storage, assessment, and transport for you.
Now look at how this basket of junior gold stocks performed during the 2008 collapse. In the same period when the S&P delivered 41%, and gold bullion – the weapon of choice for the wealthy – did 154%, gold stocks like these delivered a stunning 427% at their peak.
Those are huge gains. So you only need a small bit of money in this “insurance.”
Just a few percentage points of your overall portfolio could be enough to safeguard you.
So these stocks are perfect for investors looking to invest a small portion of their portfolio – a few hundred or a few thousand dollars.
If major stock markets hit a correction or crash, gains like these gold stocks delivered after 2008 will let you keep paying your bills while other investors get wiped out completely.
I should add that the 427% gain for gold stocks was the average after the 2008 crash. Some of the best-quality companies did even better. I personally owned one gold stock, ATAC Resources, that gave me 1,000% gains within 12 months after the crash.
I sold to lock in that win… and afterward, ATAC Resources soared another 1,000%.
I don’t sweat it – you never go broke taking a profit. But if you’d held onto ATAC, you would have made a stunning 10,000% gain in less than 24 months after the crash. Some folks did.
Insuring your portfolio with an average basket of gold stocks is easy: You can buy the VanEck Vectors Junior Gold Miners ETF (GDXJ), an exchange-traded fund for junior gold stocks.
What if you’re an active investor, looking for returns beyond the 427% average juniors delivered after 2008?
My International Speculator advisory pinpoints individual junior stocks poised to beat the market. I’ve recommended to my readers a basket of 19 small gold stocks. They all trade on major exchanges in places like New York and Toronto. If you have an online broker, you can literally buy them with the push of a button.
One of my recent top picks gained 200% in under four months between June and October. That’s in a quiet gold market, without any financial catastrophes.
If you’re at all worried about your portfolio – even if you’re just eying the possibility of a crash – I urge you to look at the downside protection of gold stocks. This “meltdown insurance” could make the difference between wading knee-deep through the blood in the streets, or watching it comfortably from a far-away beachfront.
Keep walking the path,
Editor, International Speculator
P.S. Buying gold stocks isn’t the only smart move you should be making today…
I just released an urgent video update I recommend you watch right now.
You need to see it for yourself (especially the first 47 seconds).
Because if you watch this demonstration – and take the steps I recommend – you could see up to 30 to 60 times your money… in months, not years.