A gold share to buy if you fear a stock market crash
Image source: Getty Images
I was quite surprised when the stock market rallied from last week’s troubles in Washington. I may have underestimated the strength of this rally. While there is no doubt that the markets are shaping up to be hot and in need of a healthy correction, it is really unclear when the next market plunge will take place. Genius billionaire investors like Carl Icahn and some brilliant people on the sales side recently sounded the alarm, calling for “painful” fixes that could be considered in the near term.
While I don’t rule out a sharp correction happening soon, the strength of the past week in the face of challenges, I believe, is a sign that this market still has legs. Of course, the stock market looks expensive. We have been hearing this ad nauseam for months. In many previous articles, I have noted that stocks (except for a few floating bubbles) were not as expensive as they seemed, given the type of market environment and the massive amounts of liquidity. which still have to be put to work.
Indeed, stocks may be the only game in town in this pandemic environment. While considerable momentum has driven stocks higher, I still don’t think valuations are this crazy. At least not yet. Market sentiment doesn’t seem as euphoric as it did in the late 1990s or even the merger in early 2018. That said, this rally could still end abruptly.
Be careful and hedge your bets!
Negative surprises from mutated COVID-19 variants could easily send us 10-15% less in a matter of days. As such, now is not the time to let our guard down, even as we move closer to post-pandemic normalcy.
With Citigroupis recent 2021 S&P 500 The price target being exceeded on Thursday, investors could consider a flat year, potentially depressed by Joe Biden’s corporate tax hikes. Even if you think of Citigroup’s $ 3,800 price target as gospel, don’t expect a flat ride this year. We might face a crash or some fixes by the end of the year. So, have plenty of dry powder on the sidelines and get ready to jump on any good deals that come your way.
Kirkland Lake: A leading gold title to prepare for further volatility?
If you’re worried that volatility is here to stay, consider recovering gold miner stocks. Kirkland Lake (TSX: KL) (NYSE: KL), a weakly correlated game that will help smooth out a potentially bumpy road to the post-pandemic world. My fellow Fool contributor Chris MacDonald is a raging bull on the gold miner, going so far as to label him as his top choice for those seeking exposure to precious metals.
“These macro-trends will not ease off, maybe never. We have entered a new phase of monetary and fiscal stimulus. Gold is not just a hedge; it’s a great long-term investment for investors looking for stability. MacDonald said. “Gold’s yields have been sub-par, but have done their job of staying stable during times of volatility. I expect more volatility on the horizon and think we are a long way from the end of this recession. Loading onto Kirkland Lake is a great way to gain defensive exposure. “
MacDonald thinks Kirkland is a well-run operator with an absurdly low entry price. The stock trades at just 2.5 times the book value, making it an intriguing value proposition for those looking to hedge their bets without paying too much of a premium.