Forex trading

Is gold the best refuge?

Gold
Written by forex

In the one thousand articles that you read this week, gold was mentioned again and again as a safe haven. And yes, despite the fact that the metal has shown wild volatility in the last couple of weeks, it can still be called a safe haven.

However, the question was not this, right? Before responding to it, let’s look at the very term “asset-refuge”.

“Investing in an asset-safe diversifies the investor’s portfolio and is uncorrelated or negatively correlated with the common market during the turbulence. And, while most assets fall in price, the assets of the shelter do not lose or gain value. ”

Not completely understood? When a market falls due to a particular event or disaster, most assets lose value and investors flee in large numbers in search of assets for which this event does not affect as much as risky assets such as stocks and commodities.

Yellow metal is a good example. And for a long time he played the role of the main asset-refuge. But, unfortunately, gold is not the best.

Okay, so what’s the best?

Not that I wanted to tell you this, but you’ll have to find the answer to this question yourself. Why? Because no one knows your portfolio better than you do. And that’s why, only you can determine those periods when your assets are under pressure.


The options, please.

If you are looking for alternatives in anticipation of large amounts of cash in the near future, then you should keep in mind these three options (not including gold):

Cash

Believe it or not, cash is one of the obvious options. When everything goes not according to plan, just take the cash and hide it under the pillow. Need even less risk? Buy insurance against fire. Note that this option does not imply any interest and may suffer from inflation.

Protective actions

Two words: basic needs. Perhaps you will have to change your Mercedes on Chevrolet, but you will not stop brushing your teeth. Here’s a simple example. Think about the field of medicine, children’s products and stuff that you need almost every day.

Treasury Bonds

I understand that interest is not so attractive. But they are risk-free, and in the conditions of the bear market this will be enough. Therefore, do not discard this opportunity.

About the author

forex

Leave a Comment