Vector Money Management

January 30, 2020

In times of stress Gold can be an important signal

Filed under: Market Comments — vector @ 10:47 pm

The coronavirus has caused havoc in China and caused health authorities around the world to ring alarm bells in hopes of minimizing what could become a global health crisis.  As one would expect world financial markets suffered spasms as news reports came out from China and the city of Wuhan.   It was one of those events when no one not even the authorities closest to the event knew what would unfold.  Would it be a worldwide contagion like the Spanish Influenza epidemic of a century ago that killed millions across the globe or could modern medicine and the latest DNA techniques respond with treatments that quarantine this latest viral outbreak?  No one knows at this time.  For investors it is easy to let emotions override the rational decision making process that should drive long term portfolios.  In the meantime watching the price of gold can be a useful barometer of fear in the marketplace.  Gold is recognized around the world as a safe haven and stable investment in times of great uncertainty and turmoil.  In this case gold shot up as the world’s stock markets sank on worse case fears.

Ashby Foote

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