The Fed’s Gift to You

The party is over and the hangover is coming. 

That’s what the Federal Reserve has been saying in recent days without actually saying it. With inflation still running wild, Fed officials have laid the foundation for raising interest rates in March. That will end two years of rates being near zero. 

With the pandemic waning, these officials believe that the economy doesn’t need the level of support they’ve been giving it since the pandemic started. 

So removing that support will take the form of raising interest rates alongside formally ending the bond-buying program that the Fed had been slowing in recent months. 

Investors have been watching with bated breath, with some fearing this day would come. Even without the Fed taking any action, indexes posted losses and the usual talking heads began sounding the alarm that bad times are coming. 

They’re right that some kind of pain is coming. It’s just a question of how much and just how widespread it’s going to be. 

The correction set to follow the Fed’s policy shift will likely touch just about every aspect of the market. Think about the things that have gone up in price over the past two years: housing, stocks, food, oil/gas, and you’ll see just what kind of reach this could potentially have when things take a 180. 

It could lead to standard pain. It could lead to a correction closer to what we saw in the 2000s. No one can say for sure, the only thing anyone can do is watch the trends and prepare accordingly. 

A lot of people are going to lose money, but some will make money. You can be in the latter camp by taking certain steps. We’ve seen this kind of cycle before, where those in the know foresee pain ahead and are able to act accordingly. 

That’s where safe-haven investments come in. In recent years, for many, that meant putting money into alternatives like cryptocurrency. For some investors, investing in crypto is still too new and the idea is full of too many unknowns. 

That means falling back on some of the tried-and-true investment ideas of past cycles to help weather this upcoming volatility. 

While the coming slowdown and correction will likely take many sectors down a few notches, hard assets are likely to thrive. Gold, in particular, has everything going for it. Even if the turbulence caused by Fed action is only short-term, the yellow metal will serve as a good way for investors to make money when many portfolios will be shedding value. 

There’s a reason gold has always been one of the biggest go-to investments in times of uncertainty. The trends are pointing to it showing just why that is yet again. 

It’s going to soar thanks to the end of the era of free money while many other sectors struggle to stay afloat. While the spotlight focused on sectors like tech and housing, gold spent that time holding steady. Lately, it’s been quietly taking off and that climb is only going to accelerate over the next few months. 

This is just one part of a larger emerging trend of increasing value for resource stocks, but it’s one of the sectors set to make the most noise. One play in particular is going to shine and will be at the forefront of the gains that will come from the change in Fed policy. 

You can learn all the details and see just why resource stocks like gold are still the way to go when things are about to get choppy