Mixed signals from gold and the Magnificent Seven stocks
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MANY investors contemplate riding along with the Magnificent Seven stocks, while others have found new delight in the performance of gold.
This is an important contradiction because gold is usually a hedge against economic risk. When investors worry about the economy, they turn to gold. That in part explains why the price of the commodity has, since 2020, spent so long in a sideways movement.
On the other hand, the S&P 500 has powered ahead, catching even the most experienced analysts by surprise. The eight largest financial managers in the US failed miserably to correctly forecast the index’s performance in 2023 – it added 26 per cent. But Wells Fargo, reportedly the best of forecasters, expected a miserable 12 per cent increase for the period, while Barclays predicted a fall of 4 per cent.
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