Ben Morris: Steve, what is the most important idea or trend for traders and investors to be informed about today?

Steve Sjuggerud: The biggest and most important trend is definitely record-low interest rates.

Consider this… Today, 10-year U.S. government bonds pay less than 1.5% interest. Their yields have fallen around 90% since 1981.

Let’s look at it from another angle… In the last year alone, the interest rate on the 30-year U.S. government bond has fallen from 3.2% to around 2.3%. This might not sound like much – but that’s more than a 25% decline!

Ben: What’s so important about these moves for investors?

Steve: Ultra-low interest rates will have a powerful effect. They are ultimately the fuel for much higher asset prices.

You see, after the massive fall in interest rates over the last year, investors have given up on betting on higher interest rates.

[ad#Google Adsense 336×280-IA]Instead, they are fearful. So they are buying government bonds for safety. That pushes interest rates down. But investors are sick and tired of earning next to nothing on their money.

Ultimately, these record-low interest rates will drive a mass exodus of investors OUT of bonds that earn near-zero percent and into… well… just about anything else.

Because of today’s record-low long-term interest rates, house prices should continue to rise, stock prices should keep going up, and commodity prices have started rising this year as well.

Ben: OK. But this trend has been in place for seven years. Why is it still relevant now?

Steve: How long it has been in place isn’t as important as how long low interest rates can hang around. The answer is… as we have learned over the last seven years, low interest rates can stay around a lot longer than people think.

Ben: How do you suggest taking advantage of these low rates?

Steve: Well, if I am right, asset prices can still go much higher. This gives you plenty of investing ideas. My top three choices are stocks, housing, and gold.

Ben: Can you tell us a little bit more about each idea?

Steve: Absolutely.

The safest idea that should deliver a decent return is a house… either your primary residence or an easy-to-rent, three-bedroom, two-bath house in a semi-desirable neighborhood.

Now, your readers might be thinking, “Steve, have you lost your mind? Home prices in America are near record highs!”

That may be true… For example, the median new-home price in the U.S. recently climbed to $321,000. The record high grabbed the headlines… But the housing story right now is even more powerful than the headlines alone suggest.

In short, the case for housing hasn’t changed…

Mortgage rates are near record lows. And the supply of new homes is low – there are enough to last a little more than four months at current sales levels. So the fundamental case for higher home prices is extremely solid. There’s plenty of upside.

Beyond these housing-specific numbers, the bigger issue is this: Your mattress pays no interest.

You can’t retire on next-to-zero-percent interest. You need to do something else with your money to live off it in retirement.

Mom and Pop America need to buy a rental property and earn rent… or they need to buy dividend-paying stocks. The lightbulb is starting to go on in people’s heads. People are putting money to work in the stock market and the real estate market, whether it’s the right thing for them or not.

People are also putting their money to work in gold. About one-third of global government debt is paying negative interest rates. A few months ago, I spoke with Rudi Fronk, the CEO of Seabridge Gold (SA). He explained it well…

So here is the choice that is headed your way… Put your money in the bank and watch it shrink every year. Or buy shares in a “gold bank” where you own a share of a gold deposit that grows in value.

Rudi was exactly right… In a world of negative interest rates, gold should outperform. For example, in my True Wealth Systems (TWS) newsletter, our favorite way to play gold is through the Deutsche Bank Gold Double Long Fund (DGP).

DGP is a “double long” fund – meaning that it attempts to return twice the daily change in gold prices. So if gold is up 1% in a day, this fund should be up 2%. And if it’s down 1% in a day, this fund should be down 2%. DGP is up more than 50% in 2016.

The bottom line is, as long as U.S. interest rates – and global interest rates for that matter – remain low, I expect that this will continue. I could be wrong, of course.

You’d be surprised at how high I think things could go… I expect house prices, stocks, gold, and other assets will rise to unimaginable heights before it’s all over. I think that’s the natural outcome of a world with ultra-low interest rates.

Ben: You mentioned your reasons for owning gold. What’s your view on the commodities sector in general?

Steve: The story is similar with commodities, too. Interest rates of less than 1% are like a lit match looking for a new fuse. They have already lit up stock prices. And the same is true for real estate and gold.

But commodity prices fell to 25-year lows earlier this year. This is an ideal setup… We have an asset price that has crashed, and a lit fuse in the form of near-zero-percent interest rates. Meanwhile, the uptrend has appeared.

Stocks, real estate, and gold have boomed. Commodities haven’t. Their time is now.

Investing legend Warren Buffett says to be greedy when others are fearful. So to me, it’s time to be greedy with your financial assets.

Ben: Thanks for taking the time to talk with us today.

Steve: My pleasure.

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Source: Growth Stock Wire