ETF Spotlight: The geopolitics play

Core Viewpoint - Gold continues to play a significant role in investment portfolios as a hedge against volatility and inflation, especially in the context of geopolitical tensions and economic uncertainties [3][4][19]. Gold as an Investment - Gold is viewed as a long-standing monetary asset and a store of value, providing protection against inflation over the last 200 years [3]. - Current gold prices are trading above $2150 per ounce, reflecting its status as a safe haven amid global volatility [4]. - The recent sell-off in cryptocurrencies raises questions about their reliability as a safe haven compared to gold [3]. Market Dynamics - The U.S. 10-year bond yields approximately 4%, but inflation-adjusted yields are significantly lower, making stocks more attractive with a 4% to 5% earnings yield [5][6]. - International markets are currently cheaper than U.S. markets, presenting investment opportunities, particularly in defense spending due to geopolitical shifts [14][15]. Geopolitical Considerations - Geopolitical risks, including tensions in Europe and Asia, are influencing investment strategies, with a focus on defense technology and innovation [8][9]. - The Alpha Opportunities Fund is positioned to capitalize on these shifts, overweighting allies and underweighting vulnerable regions [7][9]. Future Outlook - The ongoing AI narrative and increased defense spending are expected to drive long-term market growth, with Japan identified as an underloved market with potential [18]. - Despite anticipated volatility, stocks are favored over bonds for long-term investment, with gold serving as a diversification tool [19].