Is the Trump Honeymoon Bounce Over? Look Who is Buying Safe Havens...

by Lear Capital EditorialApril 25, 2017

The market saw a lot to be hopeful about upon Trump’s stunning electoral victory in November. The markets gave Trump a nice 5 month honeymoon bounce on hopes that his team, arguably very competent at business, would also be competent at public administration.

That hope seems to be fading. The healthcare repeal and replace attempt did not inspire confidence, and the latest geopolitical tensions in North Korea and Syria are definitely dampening hopes of widespread global economic growth floating all boats.

Investors Changing Course

If sentiment from some of the largest institutional investment houses is to be believed, investors across the market might be on the verge of changing course from risky growth stocks, to quietly accumulating safe haven assets like precious metals. For example, Blackrock's biggest mutual fund has been quietly adding gold and treasuries to their portfolio.

Known Unknowns

Echoing that famous statement by Donald Rumsfeld; a manager for one of Blackrock’s largest mutual funds, Russ Koesterich explained to Reuter’s how “known unknowns” affect his fund’s current thoughts on safe haven assets.

"There is a little political risk creeping back into investors' awareness and that's probably appropriate because there are some things out there that can go wrong… We've been raising our allocation to U.S. duration and we've been raising our allocation to gold."

“Known unknowns” are the things you know about that could go horribly wrong in unpredictable ways, a phrase that accurately describes North Korea and other volatile situations these days.

In addition to accumulating gold and treasuries, it was also recently announced that the same fund is decreasing their allocation of Google stock, fearing that a less favorable business environment is on the horizon for technology companies with strong foreign revenue streams. More reshuffling of similar globally-positioned tech stocks could be coming.

JPMorgan Stockpiling Silver

JP Morgan has been steadily adding to its hefty silver position for years now and has lately increased it by giant strides. What is going on?

In just three months both the SFE and JPMorgan both increased their already massive silver holdings by double-digit percentages! Between these two entities, their holdings of silver have reached historic proportions. Latest estimates are that JP Morgan alone holds roughly 49% of all physical silver in COMEX vaults!

This is astounding. JP Morgan is deeply, deeply invested in silver. Other major institutional investors are following suit. How does your portfolio measure up? Is it overly vulnerable to “known unknowns?” Should you increase your position in precious metals? Call us. We can help!

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