The price of gold was up this week to it’s highest level in months as investors responded to fears over global tension in North Korea and the possibility of renewed sanctions on Iran.
Gold is viewed as a hedge against “riskier” assets like stocks, so when we see a sudden surge in precious metals it’s a great indicator that the markets are concerned volatility is coming.
But here’s the tricky part - when was the last time you expected a drop in the market, and it actually happened?
Most of the time we’re taken off guard… Remember last November during the election? Every market indicator predicted a significant drop if Trump was elected, but the exact opposite happened!
Trying to time the market is a losing strategy.
It’s crucial to make sure your investments are prepared for a market correction, but not because the price of gold is going up. Be prepared for the opposite reason - because chances are when it actually does drop, none of us will have seen it coming!
- Do I know the amount of risk in my investments?
- Is there a reason for the amount of risk you are taking?
Do not change your financial strategy based on what you are hearing in the news this week. If you have a sound financial plan, you owe it to yourself to stick to it. If you don't know the risk you are taking, it's time to discover financial peace with a strong plan.