In case you haven’t noticed, things are not going well for our neighbours to the south. At the beginning of the pandemic and economic downturn, there were many economists recommending investors look to U.S. equities to keep cash safe. After all, the United States is considered the super power of the world. If there is any country set to make a comeback the quickest, it’s this country. Right?
Well today, that’s just wrong. U.S. equity funds plummeted after the crash, and while many are on the way back up, it’s unlikely to stay that way. There are a number of factors that could cause these equities to drop, but mainly it comes down to politics.
An election is coming this year, and former Vice President Joe Biden has been gaining momentum. Much of this momentum comes from calling out President Donald Trump for his handling of the current pandemic.
On top of this is the ongoing trade war that the U.S. faces. The trade war was bad before the pandemic, but at that time the U.S. held most of the cards. Now, no one wants to trade or even visit the U.S. as the country continues to see huge increases in citizens infected with COVID-19.
All of this means that while other countries reopen borders and businesses, the U.S. will be forced to keep doors closed. Social distancing and disease will continue far beyond other countries, which will affect business bottom line. This will cause a trickle down effect that could see the fall of the American empire.
Sell U.S. — go with gold
So where should you invest? Take this opportunity of low gold prices and get in while you can. Analysts believe the price of gold should soar over the next several years, with the price of gold doubling by 2030.
The price of gold dipped back in June, but is already right back to where it was in May. Analysts don’t believe it’ll slow down again, so this could be your only chance to buy up gold stocks for a reasonable price.
Now many would recommend a streaming stock at this time. But as I mention here, I’d go with a gold mining company at this point. Streaming operations may steadily climb, but producers could see a huge bump in revenue over the next few years. For the first time in years, gold producers can actually compete with royalty and streaming companies, and that’s because of partnerships.
There have been several partnerships making headlines, partnerships that were underway before the pandemic. That means there were only a few signatures left to make when the downturn hit, which made it perfect timing. While other gold miners saw a dip in share price, those prepping for partnerships actually saw an increase.
One of those stocks that’s been steadily rising is Endeavour Mining Corp. (TSX:EDV). The company purchased Semafo Inc. back in April for $1 billion. Just this month, the company has officially acquired Semafo’s gold mines in Mana and Burkina Faso.
Shares are at heights not seen since 2008, and with the price of gold only rising that should only get higher. As the company continues to produce more gold, expect a company like Endeavour to continue making large acquisitions like this. You could be looking at all-time high share prices in the three-digit range, as was the case back in 2007.
The post Portfolio Juggling? Sell U.S. Stocks, Buy THIS Instead appeared first on The Motley Fool Canada.
- $4,000 CRA CERB Extended: Do You Qualify?
- Warren Buffett: Are We on the Brink of a Stock Market Crash?
- CRA Cash: Turn a $300 Tax Break Into $8,000
- 17 Top TSX Stock Picks for July 2020
- Lightspeed POS (TSX:LSPD) Just Surged 208%: Should You Buy?
- Two New Stock Picks Every Month!
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2020