What is going to happen in the market? The experts disagree but you can use that to your advantage

Diversification is the key to building a robust portfolio. Gold and stocks are not closely correlated investments, so a healthy portfolio could have a mix of both.

Diversification is the key to building a robust portfolio. Gold and stocks are not closely correlated investments, so a healthy portfolio could have a mix of both.

There’s a lot of geopolitical instability across the world at the moment indicating it could be a good time to buy gold. At the same time, the share market is booming.

So should you buy gold or shares in 2020? At the moment, both have their benefits.

Some experts are long on gold while others see stocks as the way to go.

Last year, Ray Dalio, the world’s biggest hedge fund founder, said: “If you don’t own gold, you know neither history nor economics.” 

From the US-China Trade Wars to the unrest in Hong Kong, there’s a lot of geopolitical instability at the moment. That’s why some of the best investment experts are long on gold. Gold is the crisis commodity. During long-term global tensions, often outperforms other investments and retains its value better than stocks. Experts like Ray Dalio see it as a hedge to the current economic unpredictability.

During the instability of the 1970s, gold was performing incredibly well while stock value was terrible. More recently, consumers hedged their portfolios against the GFC by investing in the predictability of gold as stocks dropped.

This year, central banks have bought nearly 550 tonnes of gold, with China and Russia stockpiling the most. As banks use gold to counter inflation and deflation, it looks like they’re preparing for long-term uncertainty.

But at the same time, other experts such as Warren Buffett believe the stock market is going to keep soaring, for several reasons. 

Firstly, record low-interest rates are encouraging spending. While nothing is confirmed, financial experts such as UBS’s senior strategist of global wealth management, Leslie Falconio, expect more rate cuts in early 2020.

Secondly, there has recently been signs the US and China might pause their trade war. This would lead to tariff roll-backs, again encouraging global investment and spending.

Finally, 70% of S&P 500 companies have reported strong Q3 earnings. The vast majority of these companies have actually outperformed their expectations.

The S&P 500 is at all-time highs. In the year to date, it has climbed 23.26%. In October alone, it went up 4.24% and it’s still going. This is the culmination of a 10-year bull run which has seen the S&P rise 330% since March 2009.

So what do you do? Do you invest in gold or in the stock market? Some experts say one thing and others another – experts that have spent a lot of time on the market and have a wealth of experience. Either side could be right.

We have an investment that can benefit either way if the S&P 500 continues to rise and/or Gold rises. It’s been very popular. To receive the PDS click here.


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