When gold price is up, stock is down. Is there a correlation between price of gold and stock market? how to trade in stock market? Gold is usually referred as safe investment heaven. But once we refer gold as ‘safe’ we are talking about safety with reference to what? Gold works as a security cushion for investors against stock exchange .
We are comparing gold and stock exchange . Gold and stock exchange correlation can’t be established directly. But once we see the historical performance of ‘gold’ and ‘stock market’ we will understand the correlation better.
In general, gold and stock correlation is inversely proportional. which suggests , when gold price goes up, prices available market will fall learn how to trade in stock market. Historically it’s been observed that when stock exchange is most pessimistic, gold performs alright . This gold and stock exchange correlation is valid for all world economies. Sale of gold coins, gold bars, gold etf are maximum when stock exchange is performing bad.
It has also been observed that gold demand picks up fast when country’s GDP rate of growth is faltering how to trade in stock market. In such situations people like better to park their money in hard assets like gold. how to trade in stock market Currency based investment options are left alone. stock exchange is one such investment option that’s left during financial crisis of world.
But this information that gold is negatively correlated with stock exchange may be a valuable information. Consider the type of cash the boy has made since year 2001.
Just because of the very fact that gold and stocks market correlation is inversely proportional, how to trade in stock market
The could boy utilise this fact to diversify his portfolio.
He could grow his money from $600 to $6700 in 9 years
Growth: 11.17 times @ 21% CAGR.
Careful diversification of investment portfolio between stocks and gold may be a good option.
As there’s a negative relationship between gold price and stock exchange , including both of them in portfolio gives a balance.