While attending Boston University in the 1970s, I’d sometimes visit Filene’s Basement. Not for the bargains. Just to see the show.

The legendary department store chain (now bankrupt) specialized in deeply discounted items. The chain derived its name from the subterranean location of its flagship store in downtown Boston, located near my campus. The frenzy of shoppers, pushing and shoving and clawing like animals, was a sight to behold. They pawed over merchandise, much of it shoddy, just for the sake of a bargain basement price.

Similar “animal spirits” have returned to Wall Street. You should be wary.

Cheered by ostensible good news on the coronavirus pandemic, investors are rushing to indiscriminately buy beaten-down stocks. Fear of COVID-19 has been replaced by Fear of Missing Out.

Problem is, we’re in a recession that will only deepen with time. Jobless claims numbers have been literally off the charts and the coronavirus is still infecting and killing people. Businesses are shuttered and quarantine rules remain in effect.

Corporate earnings projections have plummeted. It begs the question: what, exactly, is supposed to drive future stock prices? In their zeal to find rare bargains, many investors are forgetting that the stock market needs a healthy economy, which in turn needs consumers with jobs and money in their pockets.

Laid-off workers are buying groceries with credit cards. Families are sinking under debt. Small businesses are going bankrupt. Corporations are having trouble paying their loans. None of this bodes well for financial markets.

Stocks markets are closed today, in observance of Good Friday. Yesterday, the three main U.S. stock market indices closed sharply higher. We’re in the midst of one of the largest and fastest stock market rallies ever. In the 12 trading sessions since its low point on March 23, the S&P 500 has soared 25%. But the crisis is far from over and investors who are betting on a “V” shaped economic recovery are sadly mistaken.

Below, I’ll steer you in the direction of an appealing investment play that makes rational sense right now. But first, let’s review the market’s positive and negative factors.

Good news-bad news scenario…

Not all of the news is bad, of course. The Federal Reserve’s monetary stimulus will give a big boost to struggling businesses.

New fiscal stimulus will help, too. Congress last month passed the CARE Act, a $2.2 trillion spending package that provides a lifeline to families and businesses most affected by the virus.

And yes, the number of new U.S. COVID-19 cases is flattening. But we’re still getting thousands of new cases every day for which our health system is unprepared to handle. So far, the total number of cases exceeds 350,000 in the U.S. and 1.5 million around the world, with fatalities surpassing 92,000 globally and 16,000 in the U.S. alone.

Meanwhile, over the past three weeks, 17 million Americans have filed jobless claims. Joblessness has jumped around the globe. According to the World Bank, economic damage from the pandemic could push 500 million people into poverty (see chart).

The upshot: Don’t be swayed by the excessive optimism you’re hearing from certain politicians (and their shills on television). This cheerleading is self-serving and doesn’t jibe with reality.

Some of history’s biggest stock market rallies occurred during the Great Depression, but they were only “dead cat bounces” amid a devastating long-term decline. It’s my expectation that stocks this year will revisit their coronavirus lows.

The classic safe haven…

As financial markets subject investors to a roller coaster ride, make sure your portfolio is properly hedged. That’s where gold comes in. The yellow metal is particularly appealing now as a shelter from uncertainty.

Read This Story: The Midas Method: Why Gold Shines Now

Despite the partial rebound in stocks, I expect future market swoons due to worsening economic damage from COVID-19. But don’t panic. Stick to your long-range goals. Never dump worthwhile stocks.

History tells us that stock markets invariably recover from crashes. But for the duration of this crisis, remain cautious and load up on safe havens such as the Midas metal.

The yellow metal is proven protection against crises. During the Great Recession of 2007-09, the worst economic downturn since the 1930s, gold prices rallied from $840 per ounce at the end of 2007 to over $1,200 by the end of 2008, even though inflation over this period stayed in check. As the current recession gets more severe, gold’s allure will increase.

You need to find the right gold investments and we’ve done the homework for you. We prefer gold mining equities, which can confer exponential gains compared to physical bullion or funds. For details on our favorite gold mining stock, access our special report.

Looking for ways to cope with coronavirus-induced volatility? I’m here to help: mailbag@investingdaily.com

John Persinos is the editorial director of Investing Daily.