Knowing where to put your capital is tricky, and not just because formerly comfort-giving phrases such as “safe as houses” and “blue-chip stock” haven’t quite retained their lustre. But in today’s volatile environment there’s a raft of fresh factors to consider too.
“Arguably, we have not seen this level of geopolitical and financial uncertainty since the Cuban missile crisis. There is war in Europe and the Middle East, heightened geopolitical tension, persistent inflation and growing concerns about sovereign debt,” says David Russell, chief strategy officer of GoldCore.
“Questions around the independence of the US Federal Reserve, tariffs and statements from the White House are also contributing to market volatility, while stretched stock market valuations and enormous government debt levels leave the financial system increasingly vulnerable.”
Gold has traditionally been a safe haven in difficult times and the Dublin business, which services investors in over 130 countries, has $500 million (€430 million) in assets under management and storage.
RM Block
“Countries are responding by reassessing what they hold in their reserves and investors are doing the same,” says Russell.
“Central banks have been buying gold at historically high levels, while investors are increasingly looking to gold as a way to hold part of their wealth outside the financial system and hedge against inflation and uncertainty.”
He believes long-term investors should think about risk before return. “In uncertain times, the temptation is to try to predict what happens next, but nobody can consistently do that. The better approach is to build a portfolio that is resilient to different outcomes. Ask yourself: ‘What happens to my wealth if inflation remains high, stock markets fall, currencies weaken, or we experience another financial crisis?’” he advises.
“Diversification is about ensuring that not everything you own is exposed to the same risks. That means holding assets that behave differently in difficult environments, including some wealth outside the financial system. The objective is not simply to maximise returns, but to protect what you have spent a lifetime accumulating.”
Gold has been a safe haven for thousands of years because it is scarce, highly liquid, globally recognised and has no counterparty risk, he points out. Neither does it depend on a bank, government or company keeping a promise.
“That remains very relevant today. Gold has performed extremely strongly in recent years, reflecting heightened geopolitical uncertainty, but also the enormous growth in government debt and money creation. We can see the inflationary consequences in our everyday lives; our money simply doesn’t buy as much as it used to. Over time, inflation erodes the purchasing power of our earnings and savings,” says Russell.
“Gold, on the other hand, cannot simply be printed. Its scarcity is one reason central banks have been buying it at historically high levels and why investors continue to hold it as a way of protecting purchasing power and wealth during uncertain times.”
Silver is on the rise too, and making an increasingly compelling investment case because it is both a precious metal and a critical industrial metal.
“Many of the technologies we are building the future around, including solar energy, electrification, data centres and emerging battery technologies, require silver because of its exceptional conductivity,” he says.
“At the same time, the silver market has been running a structural supply deficit. Years of underinvestment in mining mean supply cannot quickly respond to rising demand, particularly because much of the world’s silver is produced as a byproduct of mining other metals.”
The key for investors generally to remember is that uncertainty, whether related to climate, geopolitics, or market volatility, is actually a constant.
“When we are making financial decisions, we have to appreciate that there is no perfect time to get in or out of investing,” says Eoghan O’Hara, country head of Raisin Ireland, the European savings platform.
“Of course there is a lot of uncertainty at the moment, with rumours of overconfidence in the market and the potential of an AI bubble. But what I would say to anyone is that shocks are features of the world, not just of the stock markets, and volatility is a price we pay when we decide to enter into such financial decisions. There is no perfect plan. It’s not like, next Tuesday things are going to be fine, or six months from now. We just don’t know. Nobody has a crystal ball.”
Central Bank of Ireland statistics show household deposits stood at €176.4 billion at the end of July, up €9.3 billion, or 5.5 per cent, in the previous 12 months.
While high savings rates, at about €1 saved for every €8 earned, are positive, he worries savers may not be optimising their capital, as many may be in low or zero interest rate accounts, missing out on better returns.
“It’s good to see that people have the ability to save, even with all the conversations around cost-of-living crises, but are people putting their money in the right place? That’s the question,” says O’Hara.
“That’s not only in relation to savings accounts, but are they maximising their AVCs and their pensions, are they speaking to a financial adviser and looking at longer-term investing? Are they making sure their cash savings are in the right place to at least earn a fair return, and to meet their short-term savings goals?”
Savers have a wider range of choice available to them than ever, whether from pillar banks, neobanks or savings platforms such as Raisin, which provides access to 36 banks across Europe via one account.
Simply shifting your savings from an account earning nothing into one offering something “is one of the ‘lower admin’ things you can do to really improve your financial situation,” he says.
