3 Assets That Will Rise With the Ukraine Turmoil
As chaos ensues in the Ukraine, we are seeing broad stock market indexes all over the world fall in price. This is going to create many opportunities for deep value investors. However, shorter-term traders may want to consider owning some assets that tend to rise in value with crises. In this article, I point investors to three of them.
The first is gold. Investors tend to flock to gold and gold-related equities whenever there is chaos in the world. They fear that global business will suffer and that higher risk currencies and bonds will lose value during times of crisis. Gold stands out as a safe-haven trade and as money comes out of the aforementioned assets, gold will likely benefit. True, gold doesn’t become more valuable because of a crisis, as gold’s value longer term is largely a function of the global money supply. However, as I have argued elsewhere, gold is fundamentally undervalued given the rising supply of U. S. Dollars, and an international conflict could be a catalyst that drives it higher.
Investors interested in gold should consider owning shares in a gold-backed ETF. While most investors tend to flock towards the SPDR Gold Trust (NYSEARCA:GLD), I prefer the Sprott Physical Gold Fund (NYSEARCA:PHYS), which has a lower expense ratio and it is taxed at a lower rate if you hold it for longer than a year. However, the SPDR Gold Trust will do a better job tracking the spot price of gold, and given that I am pointing out gold here as a short-term trade, this could be the better option.