Welcome back to Bitesize, a monthly data-viz series in which we unpack market developments in a single chart (or two), giving you sharp insights in under five minutes. This month, we explore the recent gold rush, and the surprising implications of taking money out of the equity market during dips.
As markets were shaken by President Trump’s sweeping April tariffs, investors flocked to gold as a safe haven. The gold price surged 12 per cent month-on-month to a record $3,500/oz by April 22,1 driven by fears of recession, a weakening dollar and central bank stockpiling.
While gold can prove a useful asset to hold during crises, it is important to remember that market drops are a normal part of long-term investing – and there is a cost involved in taking money out of equities in response to dips.
As Figure 1 shows, every calendar year since 1989 has seen intra-year declines in global stock markets, sometimes steep ones, yet the majority of those years still ended in positive territory. It’s a powerful reminder that short-term term setbacks may be just noise, and jittery investors risk missing out on market rebounds.
Figure 1: Intra-year declines versus calendar year returns (MSCI World, 1980–2024)
Past performance is not a guide to future performance
Source: Aviva Investors, Bloomberg. Data as of December 31, 2024.
Attempts to time the market by jumping in and out based on short-term moves often lead to missed opportunities. We examined the growth of a $10,000 investment in the S&P 500 from 1988 to 2024, and the striking impact of missing the market’s best five, 15, 25 and 40 days during this period (see Figure 2).
Figure 2: The danger of being out of the market (S&P 500, 1988 to 2024)
Past performance is not a guide to future performance
Source: Aviva Investors, Bloomberg. Data as of December 31, 2024.
It’s nearly impossible to predict when the “best” days will happen. Hence the value of staying invested through the ups and downs should your investment time horizon allow it.
Of course, not every investor has the same risk appetite. Some are naturally more cautious, while others are comfortable riding out volatility. Life stage, financial goals, and personality all play a role. That’s why multi-asset portfolios are useful: they offer a way to tailor risk. By blending equities, bonds and alternatives, multi-asset strategies can help smooth the ride, allowing investors to take advantage of the benefits of staying invested even when markets wobble.
