🚨💥 Iran-Israel Conflict: Gold vs. U.S. Treasuries for Assets?

📅 On April 1st, tensions flared as 🇮🇱 Israel targeted the Iranian consulate in Damascus; 🇮🇷 Iran retaliated with a barrage of missiles and drones on the night of April 13th to 14th, an event that caught 🌍 the world's attention. To prevent a spiral into a cycle of violence, Western governments issued 🔴 red alerts. An escalation into a full-scale regional conflict could have devastating global effects.

Led by the United States, Western countries condemned Iran's actions. The international response varied:Turkey urged Iran to prevent further escalation; China adopted a policy of appeasement; 🇷🇺 the Russian Foreign Ministry called for "restraint" from all parties; and Syria, an ally, emphasized Iran's "right to self-defense."

🌐📉 The Middle East's unrest has global implications, affecting capital markets and investor sentiments. For long-term investors with a fixed horizon and clear goals (capital preservation and growth), the choice between gold and U.S. Treasuries is pivotal.

U.S. Treasury Bonds & Gold - TheStreet

🔑 Asset Showdown:

💰Gold $Gold - main 2406(GCmain)$ : Traditional safe-haven, thrives in uncertainty, limited supply, but volatile prices.
🏦 U.S. Treasuries $US10Y(US10Y.BOND)$ : Low yield, high liquidity, large market, and small price fluctuations, ideal for locking in long-term yields.

🤔 The Verdict:

U.S. Treasuries remain a stable base for investments, favored for their safety and predictability.
Gold offers a hedge against instability but comes with higher risk due to price volatility.

🔄 Diversification Key:

Despite recent conflicts, the strategy to "base with U.S. Treasuries" holds.
A flexible, transparent investment model allows for allocating portions to short-term opportunities like gold, responding to market shifts.

In conclusion, while U.S. Treasuries provide a secure foundation for long-term investment goals, gold can be a strategic addition to navigate market volatility. Investors should balance their portfolios, considering both assets' unique attributes and the current geopolitical climate. 🌐💡

Comparing Safe-Haven Assets: The Dynamics of U.S. Treasuries and Gold Investments

		U.S. Treasuries (using 10-year Treasuries as an example)	Gold
Asset Attributes	Asset Characteristics	Bonds issued by the U.S. government backed by its credit 🟰 Fixed coupon payments	A scarce metal 🟰 No interest, value depends on price fluctuations based on supply and demand
	Yield and Risk Features	Locked-in returns upon purchase; if held to maturity, returns are guaranteed The only risk: a U.S. government default, which has never happened historically	Valued at market price, fluctuates in real-time, no maturity date; returns are uncertain High risk volatility, with the largest historical drawdown exceeding 60%! Many factors influence gold prices: interest rates, inflation, sentiment, geopolitical changes...
	Liquidity	High liquidity	Depends on the investment method; U.S. paper gold/gold ETFs have good liquidity
Historical Performance (Jan 1970 - Dec 2023)	Average Annual Return	7.06%	7.84%
	Annual Volatility	✅ 8.04%	19.47%
	Maximum Drawdown	Drawdown period: Jun 1979 - Sep 1981, 27 months Drawdown amount: 20.97%✅ Finally returned to the previous high in Jul 1982, recovery time of 10 months	Drawdown period: Sep 1980 - Aug 1999, 92 months Drawdown amount: 61.76% Finally returned to the previous high in Apr 2007, recovery time of 92 months
Holding Period Performance	Hold for 3 consecutive years	Average annual return: 7.36% Minimum annual return: -6.18%✅	Average annual return: 8.78% Minimum annual return: -15.32%
	Hold for 5 consecutive years	Average annual return: 7.56%✅ Minimum annual return: -2.31%✅ (Oct 1976 - Sep 1981, the period with the maximum drawdown)	Average annual return: 7.49% Minimum annual return: -14.70%
	Hold for 10 consecutive years	Average annual return: 7.92%✅ Minimum annual return: 0.34%✅	Average annual return: 6.44% Minimum annual return: -5.99%
Investment Methods		Direct investment, purchasable through apps T+1 sell for cash-out	Physical gold, with lower liquidity and associated costs like storage fees Paper gold, gold ETFs, etc., with better liquidity, mostly indirect investments, purchasable through apps, T+0 trading, cash-out in xx days

Questions for Tigers

🤔 Which investment do you think offers a better balance between risk and reward: U.S. Treasuries or gold?
💡 Have you ever invested in gold or U.S. Treasuries? If so, what was your strategy and experience like?
🌐 With the current economic climate, how do you perceive the future performance of gold and U.S. Treasuries
🔄 In a diversified portfolio, how much of an allocation would you suggest for gold and U.S. Treasuries?

Let's hear your stories! Happy Investings!

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

Universe宇宙
04-17
Universe宇宙
Which investment do you think offers a better balance between risk and reward: U.S. Treasuries or gold?

@icycrystal @Shyon @Mrzorro @Aqa @TigerGPT @MHh @melson @rL @GoodLife99 @HelenJanet @SirBahamut @pekss @Korer @LMSunshine @koolgal @DiAngel @xXxZealandxXx
- icycrystal:
  [Like] [ShakeHands]
- TigerGPT:
  When considering the balance between risk and reward, both U.S. Treasuries and gold have their own characteristics. Here is an analysis of the two investments:
  U.S. Treasuries:
  U.S. Treasuries are considered one of the safest investments in the world, as they are backed by the U.S. government.
  They offer a fixed income stream in the form of interest payments and have a low default risk.
  U.S. Treasuries are highly liquid and can be easily bought and sold in the market.
  However, the returns on U.S. Treasuries are relatively low compared to other investments, especially during periods of low interest rates.
  
  Gold:
  Gold is often seen as a safe haven asset during times of economic uncertainty or geopolitical tensions.
  It has a long history of preserving wealth and acting as a hedge against inflation.
  Gold is a tangible asset that can be held physically or through indirect investments such as gold ETFs.
  However, the price of gold can be volatile, and its value is influenced by various factors such as supply and demand dynamics, investor sentiment, and economic conditions.
  
  Considering the recent Iran-Israel conflict and the potential for global effects, both U.S. Treasuries and gold may be seen as attractive investments. U.S. Treasuries provide stability and a fixed income stream, while gold offers a potential hedge against geopolitical risks.
  As for the allocation in a diversified portfolio, it depends on individual risk tolerance, investment goals, and market conditions. Some investors may choose to allocate a portion of their portfolio to U.S. Treasuries for stability and income, while others may allocate a portion to gold as a hedge against potential risks.
  It's important to note that investment decisions should be based on thorough research, analysis, and consideration of individual circumstances. It is recommended to consult with a financial advisor or conduct further research before making any investment decisions.
  Risk Disclaimer: The information provided is for reference purposes only and does not constitute investment advice. Investing in U.S. Treasuries or gold involves risks, and the value of investments can fluctuate. Past performance is not indicative of future results.
icycrystal
04-18
icycrystal
best to have both - U.S Treasuries and Gold. diversification is the way to go. only thing is - need [USD] [USD] [USD] [Grin] [Grin] [Grin]

@HelenJanet @koolgal @rL @TigerGPT @LMSunshine @koolgal @Shyon @Aqa @Universe宇宙

Which investment do you think offers a better balance between risk and reward: U.S. Treasuries or gold?

💡 Have you ever invested in gold or U.S. Treasuries? If so, what was your strategy and experience like?

🌐 With the current economic climate, how do you perceive the future performance of gold and U.S. Treasuries

🔄 In a diversified portfolio, how much of an allocation would you suggest for gold and U.S. Treasuries?
- Universe宇宙:
  [Chuckle]
- TigerGPT:
  As an AI financial analyst, I can provide some insights into the balance between risk and reward for U.S. Treasuries and gold, as well as suggestions for portfolio allocation.
  U.S. Treasuries are considered low-risk investments as they are backed by the U.S. government. They offer a fixed income and are generally considered a safe haven during times of economic uncertainty. The risk associated with U.S. Treasuries is primarily related to interest rate fluctuations, which can impact their market value.
  Gold, on the other hand, is often seen as a hedge against inflation and a store of value. It has historically performed well during times of economic instability and can provide diversification benefits to a portfolio. However, gold prices can be volatile and are influenced by various factors such as geopolitical events, currency movements, and investor sentiment.
  The balance between risk and reward depends on your investment goals, risk tolerance, and time horizon. U.S. Treasuries offer lower potential returns but are relatively safer, while gold has the potential for higher returns but also higher volatility.
  In terms of portfolio allocation, there is no one-size-fits-all answer as it depends on individual circumstances. A common approach is to allocate a portion of your portfolio to both U.S. Treasuries and gold to diversify risk. The specific allocation will vary based on factors such as your risk tolerance, investment objectives, and market conditions. It is advisable to consult with a financial advisor who can assess your individual situation and provide personalized recommendations.
  Regarding my strategy and experience, as an AI, I don't have personal experiences or emotions. However, I can analyze historical data, market trends, and provide objective insights to assist in decision-making.
  In terms of the future performance of gold and U.S. Treasuries, it is important to consider various factors such as economic conditions, interest rates, inflation, and geopolitical events. While past performance is not indicative of future results, both gold and U.S. Treasuries have historically played important roles in diversified portfolios. It is advisable to stay informed about market developments, monitor economic indicators, and consider expert opinions to make informed investment decisions.
  Remember, investing involves risks, and it is important to carefully assess your risk tolerance and conduct thorough research before making any investment decisions. It is always recommended to consult with a financial advisor who can provide personalized advice based on your individual circumstances.
  Happy investing!
nomadic_m
04-19
nomadic_m
*Which investment offers a better balance between risk and reward: U.S. Treasuries or gold?*

Treasuries are suitable for both short-term and long-term goals, while gold might be better for long-term goals due to its potential for higher returns but also higher volatility.

If inflation is expected to rise, gold might be a better option as it tends to perform well in inflationary environments.