Nowhere to Run, Nowhere to Hide

Martha and the Vandellas’ “Nowhere to Run” was one of the hottest singles of 1965, but the classic Motown hit may as well be the official soundtrack of investing in 2022. Not only did the S&P 500 post its worst first-half of the year in over 50 years and fall further into bear territory, but nearly every other asset class—the glaring exception being fossil fuels—turned in a negative performance.

In the chart below are several indices of industries and sectors we closely track here at U.S. Global Investors. Every single one of them ended in the red.

return in the First Six Months of 2022

Even traditional safe havens offered little protection. Bonds have historically shined when stocks have plunged, but Treasuries and municipals sold off in the first six months. Gold was essentially flat, having shed a little over 1%; meanwhile, gold miners were among the biggest winners of the first quarter but subsequently traded sharply down as soaring fuel costs kneecapped revenues.

Some people have argued that Bitcoin could replace gold as a store of value, but the digital asset just finished its worst month on record. The crypto lost more than 38% of its value in June alone, and for all of 2022 so far, it’s down about 57%.

If you’re a contrarian, this may be an interesting buying opportunity. Bitcoin’s 14-week relative strength index (RSI) is now in line with its most oversold levels on record, in early 2015 and late 2018. During both of these “crypto winters,” critics of digital assets gleefully proclaimed the end to Bitcoin, and many are doing so today. I’ll just say that, had you accumulated Bitcoin when the RSI was this low, you would have seen some incredible returns. (Past performance is no guarantee of future results.)

bitcoin's 14-Week Relative Strength Index (RSI) Near Most Oversold On Record