March 17, 2025
If You Aren't Diversifying, You're in Big Trouble
Dear Subscriber,
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| By Nilus Mattive |
I’ve been preaching about diversification ever since I re-joined Weiss Ratings and took the helm of Safe Money Report.
And our results over the last few years speak for themselves:
Continued gains from gold and precious metals investments …
New sources of steady income from a range of Treasury bond funds …
A handful of double- and triple-digit gains already banked from crypto-related investment vehicles.
Not to mention ongoing gains and dividend payments from many of our more-recently-added U.S. stock plays.
But just to bring the point home a bit more, let’s take a look at a few charts.
First, here’s our long-standing SPDR Gold Shares ETF (GLD) compared to the S&P 500 SPY ETF over the last two years …
As you can see, the yellow metal outperformed even a red-hot stock market!
This is precisely why we are now showing open gains north of 100% in GLD, along with solid gains in related investments in mining companies and silver.
Meanwhile, Bitcoin has absolutely trounced both of those other asset class funds more than SIX TIMES OVER during the same time period …
And as risk comes back to the fore, Treasuries are roaring back to life, too.
In fact, my recommended intermediate and long-term Treasury investments have been outperforming the stock market so far in 2025 …
This is all happening as investors begin rotating out of “risk on” assets — mostly momentum stocks — and into more traditional safe havens.
None of this should come as a surprise to you.
It’s precisely what I’ve been saying would happen and why my subscribers were positioned for all of this ahead of time.
Even in the case of cryptos — which have also been coming under a bit of pressure — we were way ahead of the curve … banking lots of big gains with just “free” allocations left on the books.
Forgive me for laughing as major Wall Street firms come late to the game in that department, with BlackRock just adding a Bitcoin allocation to its official model portfolios this past month.
Meanwhile, within the stock market, we are seeing a larger flight to safety starting to materialize as well.
This table gives you a quick rundown of which sectors have been performing best so far in 2025 …
Consumer staples, healthcare and utilities — which account for three of the top five — are typically the three-best performing sectors during recessions …
Real estate would be a prime beneficiary of renewed inflation …
And the financial services sector is expected to enjoy less regulation under President Trump.
These are all points I have made before.
In fact, if you look at what I’ve said here in these articles over the last year, you’ll find that I have been consistently warning that a period of slowing economic growth and resurging inflation — so-called “stagflation” — is a very real possibility.
Now, the data is starting to support that outcome as well.
For starters, the Consumer Price Index actually ticked back up this past month — rising 3% year over year, more than economists expected. So-called “core” CPI was up even more at 3.3%.
Meanwhile, a widely-watched economic gauge — the Atlanta Fed’s GDPNow model — just completely switched its forecast for the current quarter (January through March) from growth of 2.3% to contraction of 2.8%.
There are a lot of moving parts here.
We could ultimately see growth with inflation. Contraction and deflation. Or the aforementioned combination of contraction and inflation.
But that uncertainty alone — and increasing volatility in both the headlines and the investment markets — is now giving everyone pause and could easily become a self-perpetuating cycle.
Just to bring the point home, take a look at this chart comparing Altria (MO) — from my original recommendation to Safe Money Report readers back on June 14, 2024 — to stock market darling Nvidia (NVDA) …
Even I was shocked to find that my all-time favorite defensive stock — a boring old tobacco company — had risen almost 25%, while Nvidia had fallen more than 7% over the same time frame.
That’s a staggering 32 percentage point difference!
What’s more, Altria was yielding more than 8% when I told my subscribers to buy, and we’ve already been collecting those dividends for more than nine months now.
Which means the actual total return differential is more like 38 percentage points already.
So, bad news for most other people has been great news for us.
And it’s further proof that diversification, when combined with a bit of contrarian common sense, works.
Bottom line?
The best time to start diversifying was back when I first told you to.
The next best time is right now.
Because the broad stock market still looks overvalued to me at current levels … especially with more risks surfacing on the horizon.
Best wishes,
Nilus Mattive
P.S. Private investments are one additional asset class category that I recommend using but do not cover specifically. And since these companies are not subjected to the whims of the public markets, now is an especially good time to take a look at what’s available.
Luckily, my friend and colleague, Chris Graebe knows the space inside and out, and he has just uncovered a new company with very exciting prospects. Just click here for the full story while there’s still time to get in.
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