Two things investors look for in alternative assets
When investing in alternative assets gold remains the king.
The yellow metal performed far better than the world’s best-known cryptocurrency, Bitcoin, during October’s market volatility.
When investors buy alternative assets, they typically look for two things.
First, they want to know how the asset will perform as a safe-haven asset during times of market volatility.
It should be clear that over the last month we have seen plenty of market volatility. Stocks have made some wild intra-day swings, starting the day substantially up and then ending lower than the previous close.
In addition, the S&P 500 index, which gets tracked by the SPDR S&P 500 exchange-traded fund, lost more than 8%, so far in October.
While stocks fell, gold prices gained. Prices for the yellow metal started the month at $1,189 a troy ounce and were recently trading at $1,220, according to data from Bloomberg.
Meanwhile, Bitcoin, which has been much heralded as a new alternative asset, lost value. The price of one Bitcoin started the month fetching $6,573 and was recently trading for $6,271. That’s a drop of more than 4% so far in October.
In this case, it should be clear that during the volatile month of October gold was a far superior safe-haven asset than was Bitcoin…