I wish today’s hot stock market could run forever! But it can’t.

stock market rising and falling

Do you know your market history? We love parsing over market data to find out how physical gold prices react when the stock market changes over time.

Especially when that change is a sudden crash for stocks.

So today, let’s cut to the chase and answer a question that gets asked a lot: if the market crashes hard, what happens to gold?

In short, the answer is: gold tends to outperform stocks.

Don’t believe it? Let’s take a look at history.

These are the six largest stock market declines we’re experienced in the last 30 years:

Aug’87–Dec’87 S&P500: -34% … GOLD: +6%
Jul’90–Oct’90 S&P500: -20% … GOLD: +7%
Jul’98–Aug’98 S&P500: -19% … GOLD: -5%
Mar’00–Oct’02 S&P500: -49% … GOLD: +12%
Oct’07–Mar’09 S&P500: -57% … GOLD: +26%
May’11–Oct’11 S&P500: -19% … GOLD: +9%

In every case, gold outperformed the S&P 500. In some cases, it did so by as much 83% over just 1.5 years!

Clearly, past performance is no guarantee of future results, and we are not market timers here.

Our argument is not that you should “bet the farm” on precious metals (even though some prominent analysts believe that stock prices have reached the point of unsustainability recently).

That said, these kind of numbers just reinforce why you should seriously consider how you can make gold’s diversification effect work for your retirement portfolio.

Owning assets that rise when stocks fall is a great way to lower your overall portfolio volatility.

To show you how strong this effect is, we went back an additional 10 years to see what else we could find.

Interestingly, there was one stock market tumble – 1980 to 1982 – when gold saw a larger decline than the S&P 500. But another market crash two years earlier saw gold outperform stocks by over 70%!

Sep’76–Mar’78 S&P500: -19% … GOLD: +54%
Nov’80–Aug’82 S&P500: -27% … GOLD: -46%

Let’s take a closer look at 1980, which was an especially interesting year for gold.

In the decade prior, gold had risen over 2,000%! To put that in context, that was the biggest bull market for gold in modern history.

After that, a pullback might be expected when overall market conditions sour. (This isn’t to try to excuse a down year, but just to give that decline a broader context).

We want you to know the whole story of gold, so you can make the right decisions for you and your family.

Here’s what history tells us about gold:

1.In most cases, gold prices rise during periods where the stock market is crashing or inflation runs rampant

2. Gold and stocks tend to be negatively correlated, with stocks leading the way in times of optimism and gold benefiting when fear and uncertainty take hold

3. Historically, gold has also benefited in times when stocks have been in a holding pattern, like in the 70s decade, when gold rose over 2000% while stocks gained only 1.4% per year

Diversifying with safe haven assets tends to lower overall portfolio volatility
Gold and silver clearly deserve your careful consideration at a time like this, when uncertainty seems to be the order of the day.

If you’d like to explore these concepts more, we’re here to help.


A recent report from macro-economic research house Rosa & Roubini Associates says investors should beware of new cracks appearing in the European Union, which only just recently suffered through the controversial Brexit vote in the U.K.

Next up? Italy. And the beneficiary will be gold, says their analysts.

If this storied, ancient country were to break free from the European Union, Rosa & Roubini expect falling equity prices, big spikes in interest rates (both short and long) and a rise in credit risk around the globe.

Investors should adopt a “moderate risk-taking stance, within a defensive positioning,” says Rosa & Roubini.

“Gold will remain a crucial component of diversified portfolios, as a hedge against potential corrections across asset classes.” – Rosa & Roubini Associates, July 2018

September 2018 is a critical step in this process, if it moves forward, when the country’s newly elected government sends its new budget to E.U. authorities in Brussels. Italy’s new administration is riding a wave of populist spirit fueled by Italy’s recent poor economic results. The country has seen falling GDP while neighbors like Germany and Greece are growing in real terms.

“Political developments in Italy have catalyzed investors’ attention over the last few weeks,” says the report. “A majority of Italians believe that the euro has not delivered economically for their country.”

If the last few thousand years have taught us anything, it is that gold tends to hold its value in times of economic upheaval. Let’s hope Italian investors and others around the world heed that lesson before it is too late.


If you haven’t yet, it isn’t too late. But next week, it could be.

Every day we spend a lot of time answering questions from investors of all kinds about how to use gold and silver in their retirement portfolios. We help everyone, whether they purchase from us or not.

Do you have a question or two that we can answer?

There is no obligation, and the call is always free: 888-997-6844.

Common sense investment wisdom says diversification is key to long term success. Spreading your wealth around helps keep your retirement strategy from crumbling when times get tough.

Safe haven assets like gold and silver bars and coins are one foundation of a successful long term retirement investing play. In the home safe or held in a Gold IRA, they provide diversification, asset protection and better sleep at night for any investor.

We’re not market timers here at American Hartford Gold Group , but we are market enthusiasts. And any student of the market learns this rule first: what comes up, must come down.

We love to invest, but we believe in doing it the common sense way. Balancing stocks and bonds with safe haven assets is something everyone should consider… right now.

We are here, every weekday, and we’d like to help you take that first step.

Get Your Free 2024 Guide
Most Recent News