Will you wait to allocate to GOLD ?

Today’s Daily Byte

The weakness that we saw on Trump tariffs yesterday has completely wiped out. In fact, we've crossed the budget day high, which is a very good sign from a markets perspective. I think all the recent weakness has been taken care of. Now, of course, it will depend on whether we are going higher in terms of whether we can make a higher low and a higher high going forward or whether there’s more time to go in terms of consolidation—that of course we don't know. But the situation on the tariff front has gotten diluted in the last 24 hours. There has been a one-month postponement of the tariffs on Mexico and Canada, and China is also positioning itself to make some counter tariffs. So, I think these are just bluffing kind of positions that are happening to make the other party respond—nothing more than that.

Today, we'll talk about strength and weakness and how the weakness destroys your portfolio and how staying in strength protects your portfolio. We’ll take a look at a lot of data and how our behavior toward this particular data actually impacts our investing going forward.

Reading Time : 4 Minutes

Will you wait for more proof to allocate to GOLD ?

Many investors often compare gold returns with Nifty returns, but this is not the right way to look at gold. Gold is not meant to beat equity returns over the long term. The real purpose of gold in a portfolio is to act as a hedge when there is stress in the equity markets. It is not an alternative to stocks but a way to balance risks.

If you look at portfolio theory, it clearly states that investors should have assets that are not highly correlated with each other. If all assets rise and fall together, then there is no real diversification. The main idea is to have at least one asset that provides stability when others are facing volatility. . . . .

Reading Time : 4 Minutes

Equity vs Bonds

When we look at market data over the last century, one thing becomes very clear—equities have massively outperformed bonds. A fascinating chart by Meb Faber shows that after adjusting for inflation, $1 invested in equities in 1924 has grown to $488 today. On the other hand, the same $1 invested in bonds has practically gone to zero. This means that while stocks have built long-term wealth, bonds have struggled to keep up, especially after considering inflation and taxes. . . . . .

Reading Time : 3 Minutes