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During the financial crisis circa 2007-8 gold also sold off initially when a lot of gold bugs believed it should rise higher given the financial markets instab
by dageshi 7y ago
During the financial crisis circa 2007-8 gold also sold off initially when a lot of gold bugs believed it should rise higher given the financial markets instability.
The reason was that people needed to sell their "winners" in order to cover their "losers". Stocks were down, they sold gold which was way up at that point to cover some of the losses and get cash.
- colechristensen 7y agoOne winner of an investment strategy is regularly rebalancing your portfolio to a set of fixed ratios between asset classes. Let's say you want a 1:1 cash value ratio between stocks and gold. If stocks go up and gold goes down: sell stocks, buy gold. If stocks crash and gold spikes: sell gold, buy stocks. It's an easy way to buy high and sell low without going to extremes.