Understanding the Current Shift from Risky to Safe Assets

Welcome back,
The stock and crypto markets are currently going through a very difficult time. On the other hand, if you look at the prices of gold and silver, they are actually booming.

This is something very natural because gold and silver prices usually go up when the financial markets are under stress. During such times, people tend to shift their investments from risky assets to safer assets.

Right now, we all know that one of the biggest reasons behind the difficult situation in the financial markets is that Mr. Trump is imposing tariffs and taking decisions that are harming the global financial markets.

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Before he was elected as President, many people supported him and believed that his return would bring a bull run. The general belief was that Trump coming back to power would mean a strong market rally. But the scenario has turned out to be completely different.

We have not seen any alt season or a proper bull run. Instead, we are seeing Bitcoin struggling below $90,000 USD at the time of writing this post. On the other hand, gold prices have reached close to ₹1,68,000 INR, which is a very high level.

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Just 2 months ago, gold was trading around ₹1,30,000 INR, and a rise of ₹20,000 to ₹30,000 INR in such a short period is something very extraordinary.

To be honest, this kind of sharp movement in gold prices makes me a little concerned. Gold does move up during uncertain times, but this type of rapid rise is not something that has been seen very often in the past, at least based on my understanding.

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Because of this, I think it might be wise to stay away from fresh investments in gold at this point. You never know when the market sentiment will change and money will start flowing back into riskier assets.

In my opinion, the best approach right now is to hold your gold assets if you already have them and avoid selling your risky assets in panic. This is the most neutral and balanced way to look at the current market situation.

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If you are thinking about investing fresh money, then the risky markets are still worth looking at, but only with proper planning. Invest in portions and focus on relatively safer assets within the risky market, such as Bitcoin, Ethereum, and Solana.

If you are more inclined towards stocks, then look for fundamentally strong and safer stocks before investing. That is all for today.

Thank you and happy reading everyone.