All good things must come to an end, including summer holidays and bull markets. The bull run in US shares that began in the aftermath of the financial crisis in March 2009 has now officially passed the previous record of 3,452 more-up-than-down days from October 1990 to March 2000. This time round, the S&P500 index of US stocks has risen by more than 300 per cent — and that rise has continued throughout Donald Trump’s reign, despite his trade war threats and other follies. But it has not been reflected in major European markets, which have drifted sideways, and has been increasingly sustained by a small number of top tech stocks that have outperformed everything else on the planet.
These are, of course, the Faangs — Facebook, Apple, Amazon, Netflix and Google (via its parent Alphabet) — of which I wrote recently. Doomsters are now watching avidly for signs that the euphoria which made Apple the world’s first trillion-dollar company at the beginning of August will suddenly give way to realism about global economic forces, followed by a tide of pessimism and a major market correction.
And if it does, what then? Should you resort, like Warren Buffett, to the safety of enduring consumer-brand stocks that can ride out any downturn, or boldly seek the next wave of tech disruptors? Naturally, I consulted this column’s answer to Buffett, our own veteran investor Robin Andrews, who tells me we should never overlook the ultimate safe haven of gold, despite its recent drift at $1,200 an ounce after a post-crash high of $1,890. Major gold producers’ shares have fallen by a quarter in the past year, but for the gold-bug contrarian that could be a buying opportunity and guess what — here’s a handy acronym. Mining.com has come up with the ‘Banngs’ — Barrick Gold, Agnico Eagle, Newmont Mining, Newcrest Mining and Goldcorp — and Andrews says Agnico and Barrick are the two that stand out. Do your own research, but if ‘Faangs to Banngs’ turns out to be a winning ploy, remember you read it here first.