A balanced investment portfolio of around half in shares and half in bonds has historically served investors well by producing inflation-beating returns while protecting capital to some extent during turbulent times. However, with the outlook for both asset classes looking precarious, this strategy has lost much of its appeal.
The gold price has hit its highest level in more than five years, a sign that investors are becoming more cautious in their outlook for equity markets.
Following the failure of the US and China to reach a trade deal, fear has spread throughout the markets that the trade war between the world’s two largest economies will not be coming to an end anytime soon.
In the fourth episode of our Inside Track series, we put the questions to Alasdair McKinnon, manager of The Scottish Investment Trust.
In the first video, Alasdair explains why he has been recently been increasing the trust’s exposure to gold. He also runs through why he is wary of tech shares, which over the past couple of years have proved popular with investors.
Commodity prices across the spectrum are down at least 20% from their 52-week highs, but could rebound sharply in 2019, if concern over slowing economic growth and the trade war between the US and China lifts.
Investors are becoming increasingly cautious on the prospects for equity markets, according to findings from two separate surveys.
The pessimistic stance is highlighted first by a survey carried out by Legg Mason, which polled the views of over 16,000 investors globally. When asked to name the one investment they expect to shine more than any other in 2018, gold came out on top (taking 25% of the vote, up from 22% last year).
Investors are snapping up gold as uncertainty looms, according to figures from online market BullionVault. The site saw a 23.5 per cent increase in the number of users buying gold in July. Gold is typically in greater demand at times of uncertainty, as it is perceived as a safe, physical store of value.
Uncertainty around Brexit and trade wars has caused a spike in gold buying. Figures from BullionVault show trading in the yellow metal saw a fivefold increase last week (9-13 July).
Users of its website have been net buying an average of 12 kilos of the precious metal per day – some 421 per cent higher than the daily average over the past 12 months.
Gold is investors’ favoured safe haven metal, but here’s why it may be worth considering silver instead.