Don’t Jump on the “Sell America” Bandwagon

The U.S. stock fell in the first quarter, and suddenly a decidedly un-patriotic tone overtook Wall Street. “Sell America” became a buzz phrase, but it’s not smart advice for forward-thinking investors.

You didn’t hear “Sell America” during the previous presidential administration, when inflation was uncomfortably high but the legacy media overlooked the problems of the middle class. Now, the media pundits want you to sell your American stocks and load up on Europe or even China.

They also expect people around the world to continue dumping their U.S. dollars and government bonds. It’s as if they just noticed the global de-dollarization movement this year, though of course it’s been going on for years now.

There’s no need to sell American government bonds if you’ve been paying attention, in which case you wouldn’t have bought any bonds in the first place. After all, the “60% stocks and 40% bonds” portfolio has been the wrong strategy since COVID-19 at least, and really further back than that.

Courtesy: @TaviCosta

As for the government bonds, central banks around the world have been transitioning away from Treasury notes and into gold for more than a decade. If this trend continues, gold could easily move much higher than the $3,000s.

In reality, it’s only a small number of highly vocal commentators that want you to renounce American exceptionalism. If you listen to them, you’ll only contradict a central Warren Buffett principle, which is to never bet against America.

Buffett has outperformed all of these pundits combined, but they assume that they know better. So, “Sell America” will be the flavor of the week in the media, only to be replaced by some other buzz phrase in a few weeks or months.

If “Sell America” is a reference to de-dollarization, that’s fine. However, investors can certainly hold some “dry powder” (i.e., dollars) in their accounts to take advantage of great buying opportunities.

Where are the opportunities now? Often it takes a little bit of digging to find them, but right now there’s a massive opportunity right in front of your eyes.

Courtesy: @marketplunger1

To quote Brandon Beylo, “They usually don’t ring the bell on when you should invest in an industry. This, however, is a Bazooka Cannon going off. Got miners?”

Recent events have benefited gold, but they’ll be positive for other minerals as well. Don’t be too surprised if the gold-to-silver ratio pulls back sharply to its mean and the silver price rockets higher before the year is finished.

Still, trend followers will jump on the bandwagon and hope for the best. Last week, per JPMorgan, U.S. equity ETFs saw net outflows of 3.6 billion while developed international markets attracted above-average inflows of around 3 billion.

Nothing against international investing, but this is nothing more than chasing a trade while it’s in the headlines. Smart-money gold investors, meanwhile, bought their bullion at a cheap price when gold wasn’t in the headlines.

The President of the United States is practically telling you to buy U.S.-based mining stocks, but many amateur traders will miss out on the opportunity because they heard about “Sell America” somewhere. That’s a shame, as listening to the wrong sources tends to bring poor future returns – a lesson they’ll only learn the hard way.