Things were really looking up for share investors at the start of 2020. There were some outstanding geopolitical and macroeconomic concerns that continued to rattle on in the background, sure. But thawing relations between the US and China concerning trade helped stock markets surge across the globe.
And UK stocks benefitted from the Conservatives’ general election victory in December, a win that provided much-needed Brexit clarity (in the near term at least) and stopped the Labour Party and its very left-wing programme getting into Downing Street.
Four weeks is an eternity in financial markets though, and buyer appetite for riskier assets like stocks has nosedived. It threatens to continue falling in February too, and particularly should fears surrounding the spread of the coronavirus grow.
Metal mammoth
I recently explained why buying shares in food producer Finsbury Foods could prove a wise flight-to-safety play in these tense times. But in truth, investors in London-quoted stocks have a galaxy of brilliant safe-haven options to choose from.
Precious metals producers are always great stocks to load up in uncertain periods. In fact it’s a good idea to always have them in your portfolio. As the tragic coronavirus outbreak has shown, financial markets can plummet in the blink of an eye. So why not buy gold producer Serabi Gold (LSE: SRB)?
Gold prices have bubbled higher again and were recently at $1,570 per ounce. Many brokers believe that a rush to fresh seven-year highs is inevitable on lasting geopolitical and macroeconomic fears and a steady loosening of central bank policy. Maybe February could be the time when bullion bursts through $1,600 per ounce.
Growth at rock-bottom prices
I pledged to look at strong safe-haven growth plays in this piece and Serabi Gold is quite a doozy. City analysts think that earnings here will soar 125% in 2020 thanks to strong metal prices and booming production levels. The Brazil-focused digger smashed through the 40,000-ounce barrier in 2019 to dig 40,101 gold ounces out of the ground. And output of between 45,000 ounces and 46,000 ounces is predicted for this year.
What’s more, Serabi Gold’s a great pick for investors hunting for true value, I feel. A forward P/E ratio of 5.7 times sits well below the widely-regarded bargain benchmark of 10 times. And this low rating could further boost buying interest in the weeks and months ahead.
Those looking for safe havens may want to pay silver producers like Fresnillo close attention too. Prices of the dual-role metal recently rose through $18 per ounce again and came within a whisker of fresh four-month highs. And investment demand for the metal could keep rising along with that of gold.
In this positive price environment, FTSE 100 share Fresnillo’s expected to record a 36% profits lift in 2020. And this leaves it dealing on a rock-bottom, sub-1 forward price-to-earnings growth (PEG) ratio of 0.7. Investor fears might be rising, but the worst thing you can do is run for the hills. There’s no shortage of potential wealth creators out there.