Happy New Year, everyone! And welcome to our Friday mailbag edition.
I hope your holidays were relaxing and re-energizing. I am so grateful for your ongoing interest in our work here.
Every week, we receive fantastic questions from your fellow readers. And every Friday, I answer as many as I can. Keep ‘em coming in 2023!
Before we get into today’s questions, I want to personally invite you to join me next week – on Thursday, January 12 – for my very first strategy session of the year.
If you’ve been following my work, you’ll know I spend a lot of time in Washington. Over the past 20 years since I quit Wall Street, I’ve spent many months at a time working with our federal officials.
And where government money goes… the markets follow. So it pays to look closely at the legislation coming out of D.C.
And thanks to a law that went into effect just a few days ago, I believe the government has already picked the biggest winners and losers for 2023.
On January 12 at 8 p.m. ET, I’ll show you a little-known strategy that will give you a chance to profit from both the winners and the losers – at the same time.
Plus, I’ll give you the name of one stock to buy… and one to avoid… for free. So if you haven’t yet, be sure to RSVP with one click right here.
Now, let’s get back to this week’s mailbag.
Up first, I recently wrote a two-part series on gold. I showed why I believe it’ll be a bright spot in the markets this year (catch up here and here).
Reader Terry M. followed up – and wants to know more about gold’s more volatile cousin, silver…
Thanks so much for this timely subject. I’m ready to pull the silver trigger, but I need your perspective on precious metals IRAs. To me, it seems that the Fed would still have a stranglehold on my “silver”! Do you like silver ETFs for the scenario of a needed IRA rollover? Thanks again for your insights – and you have so many!
– Terry M.
Hi Terry, you are most welcome!
Here’s the thing about precious metal IRAs: There are a lot to choose from. Ultimately, I’m confident you’ll select the one that works best for you.
I’m not able to give specific investment advice. But in general, I do see IRAs having larger percentage allocations to silver and gold.
Especially as the Federal Reserve moves to Stage 2 of its pivot, which is keeping rates neutral. (It moved to Stage 1 in December. Stage 1 means the Fed is raising rates by smaller increments than we saw for most of last year.)
Some things for all my readers to keep in mind when choosing a precious metals IRA…
It’s best to have one that is connected to real, physical gold and silver. That means there will be less of an ability for price manipulation to come into play.
So, in general, I’d look for IRAs that have a means of storing gold and silver. What you want is to feel secure about the gold and silver investments in the IRA, so ideally, you want to see it has vault storage.
Also, I’d look for funds with no fees. One good option for gold and silver IRAs is Lear Capital. You can find some others here: https://www.consumersadvocate.org/gold-iras/a/best-gold-iras.
Next, reader James O. is eager to know where gold and silver prices are headed…
I bought gold and silver when Trump was first elected for $1,200 and $18 respectively. I bought them as a hedge against the U.S. economic collapse. Where do you see them headed within the next two years?
– James O.
Hi James, thanks for sharing your gold and silver strategy with me and others here.
There are many reasons to buy both. One is as a hedge against economic slowdowns. The second is as an inflation hedge. The third is as a long-term wealth capture mechanism. And the fourth is as a scarce metal that has use value.
I expect the price of silver to rise slowly during the first half of 2023, to a $26-28 per ounce range. That’s above where it peaked in 2022.
Then I expect it to hit a level of $30-32 per ounce by early 2024 and $32-34 by the end of 2024. That will happen as the Fed goes from Stage 2 to Stage 3 of its pivot. (Stage 3 will be rate cuts.)
I expect gold prices to follow a similar pattern, albeit a bit more subdued than silver. I expect gold prices will reach about $2,100 by mid-2023, $2,300 by early 2024, and $2,600 by the end of 2024.
Switching gears… reader Peter F. has a question that is likely on many readers’ minds from across the Atlantic…
Thank you for having me on board for only a fraction of the true worth of the information you provided. Do you recommend Rogue Economics for those in Europe? Or is this exclusively for American investors?
– Peter F.
Hi Peter, thank you so much for your kind words.
The answer to your question about whether I recommend Rogue Economics to people in Europe is a resounding yes.
Economies, markets, and trends are all interconnected on this planet. That’s why I’m constantly traveling and doing boots-on-the-ground research.
Plus, here at Rogue, our team is completely global (some of us are never in the same country at the same time!). And so are the five main Distortion profit themes that we analyze and the recommendations that we suggest.
With one caveat. In our subscription services – such as Distortion Report, Distortion Money Matrix, Energy Distortion Monitor, and Rogue Strategic Trader – all of our recommendations must be tradeable on U.S. exchanges.
So, for anyone who is in Europe and wants to participate in those investment strategies, they would need to ensure that their brokerage account has access to those.
Our flagship letter, Distortion Report, is a great place to start if you’re interested. For those who are not paid-up yet, you can learn more right here.
Next, reader Ted G. wonders what’s next for the telecommunications sector…
AT&T, Comcast, and Verizon… They are all telephone stocks and have lost value for some time now. Do you see any possibility of recovering?
Although I am not very active in the stock market, I have read and listened to many of your articles and find them interesting.
– Ted G.
Hi Ted, thanks for following my work.
I’m not able to give specific stock advice. But what I can say about those long-standing communications companies is this…
Most sectors of the market were under pressure last year, with the exception of the energy sector.
That’s because of the Fed’s aggressive, tightening policies. The markets had gotten used to cheaper money, at lower interest rates. Then money became more expensive, and the markets balked at the change.
Now, the Fed is still in tightening mode. But as I mentioned earlier, it has also pivoted to something I call Stage 1. That’s a slower pace of rate hikes.
Next will be Stage 2, or a hold on rate hikes.
I believe that once the Fed pivots to Stage 2, these large high-dividend companies that have sold off – such as the telecommunications companies you mentioned – should start to see a rebound.
Finally, reader Darin D. is looking to get away from the big banks…
Could Nomi address the risk of banking with a credit union versus a major bank? I’ve moved most of my cash to a couple of different credit unions to minimize exposure to a “bail-in.” However, I’m curious if banking with a credit union offers any advantage in terms of privacy.
– Darin D.
Hi Darin, that’s a terrific topic. Thank you for bringing it up. Good for you for taking charge of your cash.
As you know, and for others here, there are other reasons to move some of your cash away from the big bank and into smaller, localized banks or credit unions.
First, because credit unions are more community based, they provide a more personalized service for their members. Also, they tend to have higher savings rates, lower rates on loans, and lower fees than the big banks do.
Second, from a deposit safety perspective, your money, up to $250,000 worth, is as safe in a credit union where it’s insured by the NCUA (National Credit Union Administration) as it is in a larger bank where it’s insured by the FDIC.
And third, and to your point, is the privacy and security element. Since the big banks are for-profit institutions, they have to pay federal taxes, while credit unions are not-for-profit institutions, so they don’t pay federal taxes.
What that means is that the big banks are likely to have a tighter reporting line to the government, and it’s more likely that the IRS can garnish tax payments directly from big bank accounts if necessary.
In that manner, keeping money in a credit union provides an extra edge when it comes to privacy.
And that’s all for this week’s mailbag. Thanks to everyone who wrote in!
If I didn’t get to your question this week, look out for my response in a future Friday mailbag edition.
I do my best to respond to as many of your questions and comments as I can. Just remember, I can’t give personal investment advice.
And if there are any other topics you’d like me to write about, I’d love to hear from you. You can write me at [email protected].
Happy investing, and have an outstanding New Year!
Editor, Inside Wall Street with Nomi Prins