Gold and Silver Prices Over Time

As the chart from Macrotrends shows, silver tripled in price from the end of 2024 to the start of 2026. However, this was not the only such impressive rise in the price of silver. Similar rallies occurred in 2010 and 1979. The 1979 rally was when the Hunt brothers attempted to corner the silver market using options trades, failed and went bankrupt. The Hunt brothers long after argued that by owning two-thirds of all silver on earth they were establishing a hedge against inflation that was demolishing the US dollar. After both the 2010 rally and the 1979 to 80 rally, the price of silver fell back to previous levels thus erasing spectacular gains each time. Similarly, gold rallied during the 1970s after President Nixon took the US dollar off of the gold standard of $32 an ounce and peaked at $668 in 1980. Then the price slid down over the years to $259 by 2001 when low interest rates helped start its recovery to $1600 by 2011 and more than $5000 in early 2026. The point being that while gold and silver have had their rallies they have also been prone to price corrections and long periods of stagnation versus the US dollar.

Why Did Precious Metals Correct in 2026?

It remains to be seen where precious metals will go from their current levels. However, it is instructive to look not only at the impressive 2025 rally to understand precious metals as investments but also the early 2025 correction. Why did they correct? There was clearly profit taking and traders who were overextended but there was also a retreat from what was to some degree mindless enthusiasm based on shortsighted following of recent market gains. India and China were prime movers in this correction with individual investors deciding that the financial world was not about to collapse. Without a nagging belief in financial devastation, people in these countries found better places to put their money. The fact that central banks reduced their outlays for gold was a factor as well as belief that the US Federal Reserve was not about to collapse under pressure from US President Trump. When pundits have been steadily predicting disaster and traders have bid up a market as they swallow that story, there always comes a point where disaster has not occurred and sanity returns. In the recent case that sanity resulted in more rational pricing for precious metals. Of course those investors and traders who were over extended were forced to sell, which served to accentuate losses in the short term.

Is it Time Buy or Sell Precious Metals?

Famed investor Warren Buffett said that wise investors should be greedy when the market is scared and scared when the market is greedy. He routinely made profits by avoiding overpriced markets and then stepping in to pick up bargains after a correction. Is it time to pick up bargains in precious metals? Have prices fallen enough? Can we expect a prompt price recovery? If you look at the historical prices of gold and silver you can see two things. They have gained versus the dollar over the years and they have been prone to overshoot both on the upside and the downside. Looking at this, we do not expect to see a prompt price recovery but rather a price slump that will, after a few years, be erased by renewed speculation and enthusiasm for precious metals.

Are Precious Metals Good Long-Term Investments?

There is no question that the value of gold or silver will increase versus the dollar over time. The question is whether said increase will stay ahead of inflation and ahead of the stock market, real estate, etc. If you had put $1000 into stocks that tracked the S&P 500 in 1980 and reinvested all dividends your $1000 would be worth well over $100,000 today in 2026. The same thousand dollars as gold bullion would be worth less than $3000 today! Precious metals do not pay dividends or interest, although they are a hedge against inflation when compared to cash hidden beneath your mattress. Keep this in mind when you consider precious metals as long term investments.

As noted in a recent CNN business article, investors are “holding their noses” and buying stocks because “there is no alternative.”

TINA (There Is No Alternative) has become a popular mantra on Wall Street. It explains why stocks are near record highs despite concerns about trade tensions with China and what’s expected to be another round of lackluster corporate earnings next month.

Not even a huge surge in crude prices Monday following an attack on Saudi oil facilities over the weekend was enough to dampen investor enthusiasm all that much. The Dow fell a little more than 150 points, or about 0.6%, Monday. That’s a pretty tame drop, especially when you consider that the blue chip average had gained for the prior eight trading days.

It appears that investors are holding their noses and buying stocks because of the TINA trade. With the Federal Reserve expected to cut short-term interest rates again at its meeting this week, stocks could get another boost.

We recently wrote about investment risks related to the inverted yield curve. While an inverted yield curve is a reliable predictor of a coming recession and market correction or crash, it also tells bond investors that interest rates on bonds will remain low for years to come. While the prospect of lower interest rates for years to come makes bond investing seem less attractive to many investors it also makes stocks more attractive to others. For those who see stocks and bonds as their only investment choices, the TINA (There Is No Alternative) view to investing makes sense. However, from our viewpoint, this is a short-sighted defensive posture that is full of risk.

What Are Your Investment Alternatives?

When many folks think of investing, they think of stocks, bonds, and cash. There are alternatives. Some are so-called alternative investments like real estate, commodities, derivatives contracts, managed futures, hedge funds, and arts/antiquities. When choosing alternative investments, the same principles of intrinsic value should be applied to make your choices as to investing in stocks. Other “investments” that make a lot of sense are paying down your credit card balance or paying ahead on your mortgage if you have a locked-in high rate.

Real Estate Investments

Your first real estate investment should be your home. The mortgage interest rate deduction makes this an attractive investment for anyone. And, over the years, you will not only pay less on your mortgage than if you are paying rent but will also have a home to live in free and clear of debt in the end. For most Americans, their home is their greatest financial asset when they reach retirement.

Second homes can be a good real estate investment as well. However, recent changes in the tax law have taken away the mortgage interest deduction on second homes. Thus, any investment in a second home, vacation home, other property will need to stand on its own merits.

Alternative Investments in REITs

According to Investopedia, REITs (Real Estate Investment Trusts) allow investors to “buy shares in commercial real estate portfolios.” They then receive income from a collection of properties such as apartment complexes, health care facilities, hotels, data centers, energy pipelines, cell towers, warehouses, and even timberland. There are equity REITs, mortgage REITs, and hybrid REITs. The Investopedia article has useful descriptions of each of these alternative investments.

Commodity Investing: Gold

Unless you have the background and expertise to predict changes in the live cattle, pork belly, wheat, corn, or soybean markets, these investments are best left to the folks with the skills, experience, and resources to do this sort of trading. However, many investors choose to invest in gold as a hedge against inflation or as a bet on the market taking a downturn. Some investors choose to purchase gold bullion as bars or coins and store the gold themselves in a safe deposit box. Those who choose to purchase substantial quantities can find insured gold deposit facilities. Gold mining stocks often go up in value faster than gold in a bull market and Gold ETFs allow one to participate in an upward swing of gold and get out in a timely manner. We have written at length about the benefits and risks of long term gold investing.

Hedge Funds as Alternative Investments

Hedge funds attempt to multiply the profits of normal market movements through “hedging” strategies like holding both long and short positions in markets. These alternative investments are commonly in stocks. When you invest in a hedge fund you trust the skill and timing of the fund operators to make you a profit in excess of what your own market investing would provide.

Practical Investment Alternatives to Today’s Stock and Bond Markets

There are basic and safe ways to invest outside of the stock market and bond market and there are risky ways. Paying down your credit cards, paying ahead on your home mortgage, or investing in a well-managed REIT are practical ways to invest outside of the stock market. If you have money that you want to invest for the long term and are willing to wait, practical alternatives include US farmland and offshore investments in developing economies.

And, many smart long term investors are perfectly happy with investments that do not lose any money, such as long term bonds, Treasuries, and CDs at your local bank. This may not be a bad approach when you are unsure where the stock market is headed and if another Financial Crisis is around the corner!

Why Invest in Gold?

A true “gold bug” believes that in the end all paper (fiat) currencies will become worthless and that gold will hold its value. These folks buy gold bullion with the intention of holding it forever. Others jump on the bandwagon when gold is going up in price, only to sell when the price of gold corrects. Why you would want to invest in gold can vary and depending on your reason there may be different practical gold investments for you.

Investopedia writes about 8 reasons to own gold. Here are their 8 reasons.

1. Gold holds its purchasing power over the decades and centuries.
2. When the dollar weakens gold bugs believe that process will continue and they buy gold.
3. Gold is seen as a hedge against inflation.
4. The purchasing power of gold also rises during periods of deflation such as the Great Depression.
5. Gold is a refuge during periods of geopolitical crises.
6. New gold supply is dependent on new mines dug deeper and deeper so there are supply concerns.
7. Gold goes up when the stocks and the dollar go down so it is a way to hedge risk in stocks and cash positions.
8. The combination of all the above factors makes gold a good (but limited) part of any investment portfolio.

Your reasons for buying gold will determine what to buy, how long to hold, and other factors. Thus practical gold investments for one investor will differ from the practical gold investments of another.

Practical Gold Investments

Gold Bullion

Let’s assume that you are a true “gold bug” and believe that the only thing that will hold its value over the decades and centuries is gold. You will probably want to buy gold bullion. Years ago we wrote about how to buy gold for investment. We wrote about buying gold bullion at that time. The issue with gold bullion is storing it in a secure place. If you periodically buy a few gold coins from the US mint, your bank safe deposit box will do just fine. If you are routinely buying 12.4 kilogram “Good Delivery” gold bars, you will quickly need more safety deposit boxes or will need to pay to have your gold stored in a secure vault. If you want to sell any of your gold you will need to have it removed from storage and shipped to the buyer. This is an extra cost.

And, while your gold is sitting there during a stock market rally, it is not appreciating in value or gaining interest. Gold bullion is an ultimate hedge against societal and economic collapse but is commonly not a good investment. We wrote that you might want to avoid gold as an investment back in 2012 when the price was peaking. In that article we noted the increase in gold prices in the 1970s and the fall of gold prices in the early 1980s. It might be noted that while the price of gold was $1,700 an ounce when we wrote that article, it is $1,290 today! Folks who sold their gold in 2012 and bought an S&P 500 index fund did just fine, thank you very much.

Flexible and Practical Gold Investments

The best time to buy gold is when nobody else wants the shiny stuff and the best time to sell is when the whole world cannot buy enough. Buying and selling gold, instead of buying and storing it, requires flexibility. You can get this with an ETF (exchange traded fund) that tracks the price of gold bullion. We wrote about Gold ETFs in our article How to Make Money in Gold Investments. The good parts of holding shares of a Gold ETF are that you are not paying to store your gold and buying or selling does not require you to take or give up physical possession. You can buy and sell your Gold ETF shares just like you would a common stock.

And, speaking of stocks, there are gold mining stocks as well. A gold mining company that is well run will make money whether the price of gold is high or low. The price of the stock will be lower when gold is low and higher when gold is high. But, the price effect is multiplied with gold mining stocks. When the price of gold starts to go up, the price of a well-chosen gold mining stock will go up faster. When the price of gold starts to fall, gold mining stocks lose value faster than gold itself.

Both gold ETFs and gold mining stocks can be bought and sold rather easily and do not require a secure storage like gold bullion. These facts make them practical gold investments over time from important to individual retail investors.

Hedging Investment Risk with Gold

Many investment advisers recommend that gold be a small portion of any well-balance investment portfolio. If you choose to follow their advice, there are practical gold investments and impractical ones. You can as easily hedge risk in your portfolio with a gold mining stock or gold ETF as with gold bullion. And there is a lot less fuss and bother when you own shares instead of having gold bars costing you money for secure storage.

Practical Gold Investments PPT

The recent stock market retreat, which has sent the S&P 500 Index (SPX) down by 5.9% from its intraday high on Oct. 3, has intensified the debate between the bulls and the bears. Outspoken economist, hedge fund manager and market analyst John Hussman is renewing his prediction of a severe market crash that would send major U.S. stock market indices plummeting by 60% or more. He has been warning that stock valuations have been extreme for years, and long overdue for a return to historical norms. Putting this in dollar terms, Hussman recently said that the crash will wipe out $20 trillion of stock market value, Business Insider reports.

Timing a market correction is always difficult. Bears have been predicting this bull market’s demise for years! But all good things do come to an end and that includes rising stock market prices.

Steps to Take to Minimizes Losses when the Market Tanks

Investopedia offers advice from JPMorgan on how to avoid losses in the next recession.

They suggest that bonds will start outperforming stocks as much as a year before the market actually crashes. Rotating some of your profits out of stocks into bonds is their recommendation.
Cyclical stocks will take more of a hit than defensive stocks when the market heads south. Their suggestion is to start moving money out of some of your recent cyclical stock winners into long term growth stocks.

Growth stock prices are based on their earnings. When earnings drop off the stocks without a margin of safety will fall more rapidly than the general market. These folks suggest moving out of growth stocks and starting to buy value stocks.

And, things will get worse in developing markets, especially those economies afflicted by the “resource curse.”

Is This the Time to Buy Gold?

Investing in gold can be profitable if you pick and choose carefully when to buy and when to sell. We wrote about this in 2010.

There are a number of attractive options for investing in gold and there are pitfalls. Gold stock investing includes mining companies and derivatives. Many gold bugs will say that how to invest in the stock market during hard economic times is to invest in gold. However, the true gold bug will advise that you buy and hoard gold bullion or rare gold coins.

When we wrote this, gold was trading at about $1,400 an ounce. It rose for a couple of years to trade briefly in the $1,900 range before falling. Today gold trades at about $1,200 an ounce. The best time to buy gold was in the early 1970s during a period of historic inflation brought on by new social spending and the war in Vietnam. The next best time was in 2000 when interest rates plummeted and war raged in the Middle East. In each case, the price of gold steadily rose until economic conditions improved and it became contra productive to hold an asset that has quit appreciating and did not pay dividends or interest.

ow, however, might be a good time to balance your investment portfolio with a gold ETF or mining stock with the understanding that you will hold the investment for a few years and then rotate back to equities, bonds, or even cash.

How to Minimize Your Investment Losses in the Next Recession PPT

While stocks like J.P. Morgan, Goldman Sachs and Visa do well when rates are surging, Walmart and Coca-Cola struggle.

Walmart averages a loss of 0.8 percent when rates rise 25 basis points or more in one month, the worst performance of any Dow member in those instances since 2008. Coca-Cola, meanwhile, drops an average of 0.4 percent.

Johnson & Johnson, Procter & Gamble and Verizon also average losses when rates rise sharply.

A recurring theme is that stocks which pay dividends act like bonds and decrease in value as interest rates go up!

Is Gold Ready for a Comeback?

The famous Warren Buffett quote is basically that you should invest in stocks that people are fearful of and avoid stocks that everyone loves. This approach often works because the market tends to overshoot to the high side in bull markets and to the low side in bear markets. In this regard Market Watch takes a look at FANG stocks versus BANG stocks.

There’s ongoing fallout from a Bloomberg report that said China planted teeny tiny spy chips in U.S. computers doesn’t look to be over. Big tech names like Apple AAPL, -0.86% came under pressure, weighing on the Nasdaq COMP, -0.58%.

The pain for investors could spread further. Apple is a top holding in the SPDR S&P 500 ETF SPY, -0.20%-a big proxy for the S&P 500-and such passive-investing vehicles have become extremely popular in this long bull market.

That brings us to our call of the day from The Felder Report’s Jesse Felder, who suggests going against the crowd with some cheap, anti-passive precious metals miners.

The so-called “BANG” stocks in mentioned in the article are gold mining stocks.

• Barrick Gold, ABX
• Agnico Eagle, AEM
• Newmont Mining, NEM
• Goldcorp, GG

These gold mining stocks are at their lowest prices in many years. And, in our article about gold and silver as liquid investments, we noted that when the price of gold starts to rise, gold mining stocks go up faster that gold bullion and when gold starts to fall, mining stocks go down farther and faster.

In the article they also make the point that so many investors have gone over to passive investing via ETFs. Because the FANG stocks are so heavily represented in index funds, they have benefited from this change in how investors invest. And, because these lonely mining stocks are in nobody’s passive investment portfolio, they are more greatly under-priced than one might expect from the price and recent performance of gold bullion. If the stock market gets hurt by higher interest rates, not to mention the trade war between the USA and everyone else, gold may make a comeback and these BANG stocks could do very well on the upswing in gold prices.

Meanwhile take a look at the dividend stocks in your portfolio and decide which of these will suffer as interest rates go up.

Which of Your Investments Will Suffer as Interest Rates Go Up? PPT

The markets have continued trending upward despite seeming to be overpriced. That is because earnings keep increasing. But, what happens in a trade war is that earnings take a big hit. CNBC talks about a bear market before the current correction is over with.

Amid sharp sell-offs and quick rebounds, one strategist forecasts a possible bear market for Wall Street before all is said and done.

“I wouldn’t be surprised if we saw a 15 percent or even a 20 percent move off the highs before this thing finally bottoms out,” Matt Maley, equity strategist at Miller Tabak, told CNBC’s “Trading Nation” on Tuesday.

So, if the market is heading south, are there any safe investing niches today? Consumer stocks like Clorox and Procter & Gamble are relatively flat but have not performed all that well on the year. Utilities like Southern Company may not see direct effects of a trade war with China but as interest rates go up their dividend will look less attractive and the stock price will adjust. Where else can you look for safe investments today?

Biotechnology

At the start of the year we wrote to invest in gene editing companies.

The world of medicine is about to change. Diseases that had no treatment and conditions that cause lifelong suffering may well be cured at the source. Biotechnology has advanced to the point where the human genome can be edited and fixed! Companies that are on the leading edge of this new technology will not only change the world of medicine and your life. They can be profitable as well.

Learning to read the human genome has unlocked virtually unlimited possibilities for the treatment and cure of diseases. The companies that learn to harness this knowledge have a shot at riches beyond imagining. But, the  key to success in this realm is to do so efficiently and promptly before competitors come along with competing treatments.

Because picking winners in the world of biotech can be a gamble, it is wise to invest in several startups or in a biotech ETF in order hedge your risk and increase your chances of picking a winner. ETFdb.com provides a biotechnology ETF list that you might consider reading.

Biotech ETFs invest in stocks of companies in the biotechnology industry, many of which are involved in the use of biological processes such as recombinant DNA technology, molecular biology, genetic engineering, and genomics.

The current value of many of these companies lies in the promise of a profitable set of products. Thus they are not affected by the immediate swings of the economy or the markets. This makes them a safe investing niche in regard to a developing trade war or economic downswing. They do, however, have their own set of risks and the way to manage risk in this sector is to diversify with several well-chosen companies or an ETF or two.

Obviously gold is going up in price as the Chinese slap tariffs on pork, fruit, and ethanol in retaliation for US tariffs on steel and aluminum. The Trump administration is looking at tariffs on Chinese tech products and the long-feared trade war is probably upon us. Add the economic damage of a trade war to an already-falling US dollar and you have an ideal scenario for why you might want to buy gold today.

Timing Is the Key

When investing in gold, timing is all important. Anyone who bought gold in the early 1970s when Nixon took the US dollar off the gold standard made out like a bandit. And anyone who stayed in gold until it fell off in 1980 lost part of their gains, or all of their investment if they had just purchased the shiny stuff. Then as the long economic and market rally of the 1980s and 90s took place, gold went to sleep arriving at 2001 at around $275 an ounce. Then the dot com bubble burst, interest rates fell, and gold went on a tear again right into the Great Recession. In 2011 gold briefly traded at $1,900 an ounce and was selling for $1,600 in 2012 before in fell back to the $1,060 range by the end of 2015.

As the Gold Price chart shows, gold is down nearly 15% from 5 years ago and up 335% from 16 years ago. Anyone who timed the gold market correctly has made money in the process. And, why might you want to buy gold today? Gold is an ideal refuge in times of political, economic, and social uncertainty.

How to Invest in Gold

We looked at investing in gold in an article published 8 years ago.

There are a number of attractive options for investing in gold and there are pitfalls. Gold stock investing includes mining companies and derivatives. Many gold bugs will say that how to invest in the stock market during hard economic times is to invest in gold. However, the true gold bug will advise that you buy and hoard gold bullion or rare gold coins. A current scare tactic in the gold coin market is that “the government will come again for your gold.” Roosevelt signing his executive order to prevent gold hoarding is rewritten as the confiscation of gold. Gold peaked in 1980 after a decade of inflation and promptly dropped. Gold bullion has not made it back to 1980 prices adjusted for inflation despite a fourfold increase in value in the last decade.

We noted that gold mining stocks often go up in price farther and faster than gold itself as a gold rally starts. And these same stocks go down faster and farther when gold loses its luster. There are gold ETFs in which you can invest and not have to worry about secure storage of your gold coins and bars.

Within Reason

Portfolio diversification should apply to when you buy gold as an investment, or bitcoins, or any investment. If you pull all of your money from all other investments and buy gold you had better be right. The better choice is to treat gold like the purchase of a single stock as part of your portfolio. This approach will lessen your gains in a gold rally and protect you from disaster if you timing of the gold rally is incorrect.

The U.S. dollar is beginning to enjoy a bullish turnaround after declining for much of this year, and some strategists are watching for how its recent gains will impact equity markets domestically and abroad.

Should this bounce continue, domestic markets with large multinational companies such as the S&P 500 would likely take a hit, as the negative impact of a stronger dollar on foreign earnings begins to be felt.

Commodity markets such as crude oil and metals, priced in U.S. dollars, could also feel pressure from a stronger greenback, as could emerging markets, Maley wrote. The inverse moves in the large emerging markets exchange-traded fund, the EEM, were “incredibly exact” the last two times the dollar reversed, he wrote. Specifically, he pointed to the period between September and December of last year, as well as the period between this January and late September.

Since oil is priced in US dollars the cost of oil goes up in foreign markets when the dollar strengthens. This creates losers, especially in developing economies. US exports also become relatively more expensive when priced in US dollars which can hurt US manufacturing. US exporters may continue to price their products offshore in local currencies and that will allow them to keep their customers but will eat into their profits. In the end US exporters are losers with a stronger dollar and foreign competitors are winners.

High Stock Prices Based on Earnings

The US stock market is priced at historic highs based on price to earnings ratios. But as earnings continue to impress investors keep buying. This is the intrinsic stock value approach. So long as earnings stay strong, stocks will remain high. But a stronger dollar could eat into profits and that would create winners and losers in the US stock market.

Poor Gold

Gold is a refuge in times of economic and social turmoil. Gold is what you buy when you no longer trust the stock market or paper currencies. But what happens to gold when the dollar goes up and stocks are hot? CNBC reports that gold is at a seven week low.

Gold sank as low as $1,271 on Tuesday, its lowest level since Aug. 9. And some strategists see the yellow metal falling further still.

“The fundamentals for gold in the long term are not very good. If you look at how gold tends to perform, it basically moves opposite interest rates or the dollar,” said Gina Sanchez, CEO of Chantico Global.

As the market enters a rate normalization cycle, rates are likely going to rise, and with it the dollar, adding to the pressure on gold, she said Monday on CNBC’s “Trading Nation.”

If you are interested in gold investments consider when to enter and when to exit the gold market and which vehicles to use. For the time being gold is a loser as the dollar strengthens and interest rates go up.

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The U.S. dollar Index has broken a critical technical support level that could lead to a sharp decline, according to a technical analysis, falling as much as 13 percent from current levels. That retreat promises to boost stocks, oil, gold and affect other asset classes.

This is a dramatic turnaround from a few months ago when U.S. Treasury yields and the dollar jumped following the election of Donald Trump as President on November 8. Back then, investors anticipated an accelerated expansion of the economy at a pace of 3-to-4 percent yearly. But optimism has faded that Trump can achieve this goal anytime soon, if at all. [You can] couple that with the Fed’s plans to scale back the pace and size of rate hikes, which has caused yields, and therefore the dollar, to reverse.

Investments that go up in dollar value in this case are ADRs (American Depositary Receipts), gold and other precious metals, oil and oil stocks and US multinationals who gain much of their income from sales offshore. And for those with the capital and know how foreign direct investment becomes attractive.

Follow the money is age old advice for knowing why something is happening. In this case we would like to follow the money that goes into foreign direct investment. Foreign direct investment is done by folks with lots of money and the intention to stay a course and make a profit. If you are looking for offshore investment ideas, take a look at where foreign direct investment goes year after year after year.

The article is from 2014 but the World Bank has a current version.

Foreign direct investment, net inflows (BoP, current US$)

International Monetary Fund, Balance of Payments database, supplemented by data from the United Nations Conference on Trade and Development and official national sources.

You can invest offshore and simply take advantage of business opportunities in a growing economy or you can take advantage of exchange rates. Years ago we suggested that one might invest in Colombia and the peso. What we wrote then is still true today as the dollar weakens.

If ever the famous Baron Rothschild “blood in the streets” quotation about investing were to apply in the later 20 th and early 21 st century, it would apply in Colombia. Colombia is emerging from a three generation long period of civil strife. The civil war in Colombia began in the 1950’s. Rebels demanded land reform and the return of confiscated property to poor farmers. In more recent years surviving rebel groups had been linked to cocaine trafficking and kidnapping. In the last decade or so rebels have been largely driven from the cities and peace talks have started. It could be that the time has come to invest in Colombia and the peso.

Since we wrote this article in 2012 two things have happened. First, and most important for the people of Colombia, peace between the government and rebel groups has been achieved. Secondly the price of oil has fallen. The Colombian peso is closely tied to the price of oil. Thus the peso trades at about 60% of its usual value versus the dollar. If you invest in a country like Colombia when its currency is weak you can sell your investment when the currency is strong and profit first and foremost on the improved exchange rate!

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Major stock indices closed down more than 1 percent Tuesday as traders worldwide reacted to a rapid escalation of the North Korean nuclear crisis, a second powerful hurricane barreling toward U.S. shores in as many weeks and a looming political fight over the increase in the national debt ceiling.

Financial stocks and insurance companies whose balance sheet could be bludgeoned by another hurricane were among the hardest hit.  Conglomerate Berkshire Hathaway, which is heavily bent toward insurance revenues, was down nearly 2 percent. Goldman Sachs Group and JPMorgan were down 3 percent and 2 percent respectively. Bank of America was down more than 3 percent as well.

Many investors are investing in gold as a hedge against risk but US treasuries are also up as others flee the stock market. Regarding the hurricanes many stocks will do well because of rebuilding and reinvestment related to hurricane damage. Those in the path of the storms who suffer damage are exceptions. CNBC and Cramer’s Mad Money notes that as Texas rebuilds after Harvey certain stocks will do well.

Cramer expects potentially tens of billions of federal dollars to flood Texas as the waters recede, especially because it is such a largely Republican state.

The massive reclamation project in Houston will likely deliver a boost to an array of companies related to rebuilding, the “Mad Money” host said.

From companies dealing in homebuilding materials – think Weyerhaeuser, Louisiana-Pacific and USG – to road aggregates – Martin Marietta Materials’ wheelhouse – to roofing – the specialty of Owens Corning and Beacon Roofing – Cramer is anticipating a lift across the board.

While large construction and supply companies will benefit across the board so will the likes of Home Depot and Lowe’s for do it yourselfers who are fixing up lesser damage. Also Houston the flooding damaged as many as half a million cars and trucks. That will be a lot of sales for local dealers and for the auto industry.

Big Oil

How about oil stocks? After all it was Houston that got hit by Harvey. The Motley Fool speculates on what hurricane Harvey means for oil stocks.

As Harvey approached the Gulf Coast, companies were forced to take immediate preventative measures. These included shutting down refineries on the Texas Gulf Coast, where more than 25% of the nation’s refining capacity is located.

Overall, Harvey knocked out more than 10% of the country’s refining capacity.

Besides refineries, many offshore oil platforms in the Gulf of Mexico had to be evacuated to ensure worker safety or shut down due to pipeline issues. Anadarko, for example, had to evacuate four of its 10 Gulf platforms and shut down four more. As of Friday, the U.S. Bureau of Safety and Environmental Enforcement said workers had been removed from 86 of the 737 manned oil and gas platforms in the Gulf. Onshore operations were also affected: ConocoPhillips ceased all of its operations in the inland Eagle Ford Shale.

Many companies will lose revenue on a temporary basis but will recover. Refiners will see better profits during the temporary rise in the price of gasoline.

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