This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Forget the Economic Data, Buy Gold and Silver

Stocks in this article: ^GSPCTMNSANY

NEW YORK (TheStreet) -- Despite the announcement of a strong consumer spending data for the month of March, indicative of an improving economy, the S&P 500 , and Dow Jones Industrial Average are lower Friday. This raises a question -- just how well is the economy improving?

The Commerce Department said Thursday that consumer spending increased 0.9% in March. This shows the economy is picking up after a cold winter stalled growth in the first quarter. And impressively, the increase in March is the highest since August 2009.

With companies such as Toyota (TM) and Nissan (NSANY) posting improved sales data, there is no arguing that consumers are indeed spending more.

Jobless claims in the U.S. also fell to 6.3% in April, according to the U.S. Bureau of Labor Statistics, which is the lowest since September 2008. That's a 0.4% point decrease compared with March 2014 and better than the 0.1% point decrease predicted by analysts. All of these bode well for the economy and stocks going forward.

But the concern is with the growth rate. Let's face it, with these improvements being the best in four to five years, there is no arguing economic growth is slow. For a growing economy, these figures should be overtaking other figures from maybe 2013 or, conservatively, 2012, but definitely not 2009 and 2008. It just shows that the growth rate is low.

Moreover, the unemployment data from the eurozone don't indicate a global economy that's improving at a fast rate. For instance, in March its unemployment rate was held high at 11.8%. And this has been the trend over the past few years.

In general, when the economy is growing at such a slow rate, paper assets becomes more volatile, as we're closer to a recession than boom. The point here isn't to say that we'll be in a recession soon. The point here is to emphasize the need for a well-balanced portfolio, which protects your wealth in this period of economic uncertainties.

One of the best ways to diversify your portfolio is by adding some precious metal -- notably gold and silver -- to your portfolio, since they usually move counter to the paper money. A binary options platform reported on April 30 that "Expectations of a reduction in economic stimulus by the Fed, coupled with forecasts of strong employment figures from the world's top economy pushed contracts for the precious metal [gold] down."

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,719.00 +33.27 0.19%
S&P 500 2,052.75 +4.03 0.20%
NASDAQ 4,701.8670 +26.1550 0.56%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs