Stocks and bonds have been volatile within a narrow trading range since the Federal Reserve announced its latest easing move Sept. 13.
In this environment, gold and dividend stocks represent strong investments, says David Rosenberg, chief economist and strategist at Gluskin Sheff, in a commentary obtained by Business Insider.
The precious metal touched an 11-month Monday, with the December Comex contract closing at $1,794 an ounce.
Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.
Gold has gained not only from expectations that the third round of quantitative easing will spark inflation, but also from trade tension, Rosenberg says. He cites the U.S.-Mexican tomato dispute, the U.S.-European aerospace conflict and trade spats between the United States and China as examples.
As for dividend stocks, they have thrived the past 3 1/2 years as investors seek yield in an environment of record low interest rates. Thanks to a strong earnings environment, 257 of the Standard & Poor’s 500 companies have announced dividend increases this year, Rosenberg notes.
He also likes food and fertilizer investments. Corn inventories have slipped, and wheat prices are likely headed higher, Rosenberg says.
And finally, he recommends corporate bonds, thanks to companies’ strong balance sheets.
On the gold front, Federal Reserve Chairman Ben Bernanke’s comments Monday that the Fed will keep easing even as the economy recovers convinced some experts the rally will continue.
“People are hurrying up and buying gold” in light of those remarks, Frank McGhee, head gold dealer at Integrated Brokerage Services, tells Bloomberg. “The inflation worries are back.”
Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.
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