Tags: Skarica | gold | Europe | correction

Sit Out the Next Correction and Get Ready For the Next Leg Higher

By    |   Thursday, 27 Sep 2012 12:23 PM

We have seen some themes coming back in the market as of late, as people are worried about the debt crisis in Europe and the U.S. fiscal cliff.

European markets have corrected, as have precious metals and oil. However, while I think this short-term correction could last a bit longer, I also feel that it is just a correction that will be followed by much higher prices.

Central banks around the world are flooding the markets with liquidity. This will take a little while to take effect, but it is inflationary in nature. I also feel that most of the bad news has been priced into European stocks. Markets from Italy to Spain to Greece are trading at four to seven times earnings. We all know much of Europe is struggling; however, I think things are beginning to stabilize.

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

In the coming weeks and months, I expect to hear worries over Greece, Portugal and Spain once again, as people use this as an excuse for a pullback in both equities and precious metals.

Gold stocks, as judged by the Market Vectors Gold Miners exchange-traded fund (GDX), are trading at 14 times earnings, less than half their historical average. I think these valuations, combined with loose monetary policy, will lead to large gains in Europe and precious metals.

Remember, even though both the United States and Europe are printing money at a rapid pace, it is going to take some time to kick in.

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

That’s why instead of fretting over this correction, I am embracing it. We are not going to see my recommended gold stocks this cheap for a very long time.

Therefore, sit out the next correction and get ready for the next leg higher!

About the Author: David Skarica David Skarica is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He also writes the Gold Stock Adviser. Discover more by Clicking Here Now.

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DavidSkarica
We have seen some themes coming back in the market as of late, as people are worried about the debt crisis in Europe and the U.S. fiscal cliff.
Skarica,gold,Europe,correction
346
2012-23-27
Thursday, 27 Sep 2012 12:23 PM
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