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China Trade Festering + How Are Gold Investments Performing?

by Financial Design Studio, Inc. / May 31, 2019

Over the last several weeks as trade tensions with China have started to fester again, we’ve mentioned that if you don’t like the volatility you should make some changes. Let’s talk about what some of those changes can be (including Gold investments). Ultimately, whatever changes you make will all be specific to your situation.

Safer asset classes typically include investments like CDs, bonds, or even a money market.

To help explain why you might make some changes look at the graph below. We’ve shown you a comparison chart between how the broad market S&P 500 Index has performed (in blue) and the ETF representing Gold (GLD). You would typically own Gold investments if you believe the market might be heading for lower performance ahead. Now, this isn’t just lower performance because of a temporary change, but rather when investors think there is a longer term, serious issue, that may take time to correct.

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Knowing the reason why Gold investments may be an investment to use we can now understand some of the performance differences we see below, as I’ve circled (in red). You can see during these times where the two investments are performing differently, they usually behave opposite of one another. So when one is going up, the other is going down, or vice versa.

Now, this is not always the case, but you can see it happens a good amount of the time. This visual helps to explain why you allocate different percentages in your portfolio to different types of investments.

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So what does this mean about where the market is today?

There are issues such as China trade tensions, upcoming elections, and interest rates that are giving us some reason to evaluate if changes need made ahead. There isn’t anything that has us flocking for the Gold at the moment. However, please consider if making any changes to different investments might help you sleep better in the days ahead.

Wondering how this affects your investments? Schedule a call with Michelle and Steve to discuss your portfolio today.

Ready to find out more?

Contact us today for a free 30-minute consultation!

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Financial Design Studio, Inc.

We are financial advisors in Deer Park and Barrington, IL. A team with a passion for helping others design a path to financial success — whatever success means for you. Each of our unique insights fit together to create broad expertise, complete roadmaps, and creative solutions. We have seen the power of having a financial plan, and adjusting that plan to life. The result? Freedom from worrying about the future so you can enjoy today.