In 2009, the stock market dropped nearly 40%, real estate values plummeted, unemployment surpassed 10% and the dollar weakened. It was evident, that although stocks, bonds and real estate are different asset classes, during crisis, all three, were highly correlated. This perfect storm evaporated retirement savings and nearly wiped out the safety net of many hard working Americans, including our parents.
MARKET CRASH EXPERIENCE
Allegiance Gold’s founders have experienced firsthand the myriad catastrophic outcomes of their parents’ retirement portfolio – fully invested in stocks and bonds – and the lack of knowledge in investing in precious metals. Our parents lost almost 50% of their retirement savings right when they were about to retire. This forced them to continue working passed retirement age. The effect of the crisis was not only monetary, but it also took a toll on their wellbeing and quality of life.
After diligent back testing, Allegiance Gold’s founders uncovered that precious metals, as in Gold, Silver, Platinum and Palladium, were inversely correlated with the market. While the market was deteriorating, the price of these precious metals was appreciating. This meant that, if individuals had invested a portion of their retirement accounts in precious metals prior to the financial crisis and recession, then their portfolio would not have suffered a nearly 40% loss.
IMPORTANCE OF DIVERSIFICATION
Allegiance Gold helps individuals protect their retirement savings through diversifying and investing in precious metals by establishing a self-directed Individual Retirement Account. The importance of diversifying in absolutely different asset classes was amplified in both the 2000 and 2009 financial crises. Mainstream media, government tax breaks, employers and large financial services companies (the institutions that act as a custodian of your retirement account, yet promote specific types of mutual funds with hidden fees) have often promoted investing in the stock market and real estate as a means of accumulating wealth. However, these institutions neglected to emphasize wealth preservation through investing in precious metals.