If you had hoped that 2026 would usher in investment stability, you’re already disappointed after watching the stock market tumble amid the escalation over Greenland ownership and a looming threat of a transatlantic trade war.
Over the Martin Luther King Jr. holiday weekend, President Donald Trump intensified his calls to take over Greenland and threatened to unleash another trade war against NATO allies because he didn’t win the Nobel Peace Prize.
Trump said he would impose 10 percent tariffs, starting Feb. 1, on all imports from those countries opposed to his bid to control Greenland. If he doesn’t get what he wants, the tariffs increase to 25 percent on June 1.
The U.S. stock market didn’t respond well, with the S&P 500, the Dow Jones Industrial Average and Nasdaq Composite all down on Tuesday.
“Investors will be hoping for some sort of de-escalation deal on Greenland, which removes the risk of a breakup or at least serious rupture in the Nato alliance,” AJ Bell investment director Russ Mould noted in a market analysis. “If the crisis deepens, it is unlikely to spell good news for global equities.”
Naturally, you might be wondering: What in the world should I be doing to protect the money I’ve been saving and investing for retirement?
Maybe you’ve been eyeing the surge in gold prices and asking whether it’s a safer haven. I’m hearing this from a lot of people fearful of an economic Armageddon. Gold might breach $5,000 per ounce.
Or perhaps you’ll consider buying cryptocurrency to escape stock market volatility. It’s very enticing with bitcoin trading near $90,000.
My advice: Stay clear of pitches that use scare tactics, claiming that gold is the safest bet against inflation or an economic meltdown in the United States or Europe. Unlike investing in a stock that pays a dividend or in real estate yielding rent, gold has no inherent earnings power. And neither does crypto. To profit, you have to hope that someone else will come along and pay more than you did. This is referred to as the “greater fool theory.”
Also keep in mind that crypto’s volatility as a currency and as an investment makes it unsuitable for the average investor. Instead, it’s a bubble riding on vibes — “a speculative asset held by a relatively small, politically connected share of the population,” Paul Winfree, president and CEO of the Economic Policy Innovation Center, wrote in a Washington Post opinion column.
I’m actually more concerned about you being scammed. You know fraudsters follow the news too, right?
Schemes involving gold and other precious metals continue to top lists of financial products and practices that exploit investors.
In one type of con, a fraudster will manipulate victims to cash out their investment accounts and purchase precious metals, such as gold bars, according to a reportby the Financial Industry Regulatory Authority (Finra). Once purchased, the con artists will persuade victims to turn over the precious metals to couriers, who might impersonate a government official, claiming it’s “under the guise of offering custody or safekeeping services.” In another scheme, promoters use high pressure to sell gold IRAs with massive markups and hidden fees.
When it comes to crypto, the excitement about digital assets and the technology behind them creates the perfect environment for fraudsters who capitalize on investors fearing they will be left out of the next great thing.
Although gold can offer some useful diversification in a balanced portfolio, an investment in gold is not foolproof. You have to do research to understand how to invest and the cost of ownership. When you buy gold during a crisis, you often buy at the peak, when fear has pushed up the price. If the trade war or conflict de-escalates, gold prices can drop rapidly as investors return to stocks.
“Precious metals prices can fluctuate just like other investments, and frauds that oversell safety, overinflate the price of metals, and overcharge fees and commissions rob older adults of their retirement nest eggs at a point in life when they might be unable to return to work or otherwise support themselves,” the Commodities Futures Trading Commission and FINRA have warned.
If you’re going to invest in these assets, experts generally recommend keeping gold or crypto at a small percentage of your portfolio rather than ditching your long-term investment strategy.
Keep in mind that historically, markets have weathered trade wars, pandemics and geopolitical ruptures. The biggest losses usually stem from people who panic and sell their stocks before a recovery. As another AJ Bell expert, Danni Hewson, head of financial analysis, recently noted: “Last year’s bout of tariff turmoil was quickly forgotten and the year ended with a record-breaking run for many indexes.”
I won’t tell you not to be concerned. But don’t let fearmongering dictate your financial decisions. Keep your exposure to risky and speculative investments small and keep your skepticism high. One of the biggest threats to your investment portfolio is panicking and abandoning a proven, long-term strategy.
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