By David Forest, editor, International Speculator
Have you ever wondered how the ultra-rich protect their wealth?
After all, as stocks collapsed, the world’s wealthiest people faced losses in the hundreds of millions or even billions of dollars.
What do they do to protect against this massive downside?
It’s simple. 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.
While stocks are starting to rebound from the recent crash, no one knows what will happen next. That’s why it’s important to be prepared… and why physical gold should be part of your portfolio.
But owning 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.
In short, this method can not only protect your wealth against the market volatility we’re seeing… but it’s also a solid avenue to secure huge gains during a crash.
First, I’ll explain why gold is still one of your best bets during a crisis… and then I’ll lay out this little-known method that any investor can take advantage of…
Gold bullion is still one of the best safe havens for your portfolio. 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.
You can buy shares of companies that develop gold mines. I’m talking about junior gold stocks. These are firms that own physical gold themselves, who do the storage, assessment, and transport for you. And whenever gold performs well, as it usually does after a crash, junior gold stocks benefit even more.
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.
We’re already seeing this play out today. During this most recent correction, gold has completely recovered its losses. And junior gold stocks are recovering faster than the wider markets since before the crash in February.
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 another 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 after 2008 was the average. 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.
Keep in mind, I’m not recommending ATAC Resources today.
But 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 a basket of 21 small gold stocks to my readers.
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 has gained 375% since October. That’s despite the recent sell-off we’ve seen. (And I just revealed a brand-new pick in the latest issue. Paid-up subscribers can access it here.)
If you’re at all worried about your portfolio, 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 have 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.