The Trigger for Stock Price Gains: Falling Gold Prices
For a while I’ve been wondering what it would take for investors to pile back into stocks. A lot of investors left the market in the last 5 years and haven’t returned, but eventually rising prices should be enough to convince them that it’s safe again. Of course by the time they jump in again it won’t be safe and they’ll have missed out on the best gains. Still, the recent price rises in the US market seem to only be fuelling fears that keep people away from stocks.
But I think I’ve finally found what it will really take. While I was reading an article on the Globe and Mail, a sidebar linked to a video titled “With Falling Gold Prices, Investors Turn To Stocks”. So it turns out I was missing part of the story. People weren’t content to merely sell low and buy high in stocks, sitting in unproductive cash or bonds while waiting. They had to go out and lose more money speculating on gold first. I guess that leaves them with less to move back into stocks now.