Is there a “middle risk” investment type in between stocks and bonds?

[TrustTheMarket]

Let’s say you wanted to have a portfolio of around 70% stocks, 30% bonds, but is there something I could invest in that carries a risk “in between” the two, and what funds or ETFs would meet this need? So in the end, I could be 60% stocks, 10% middle risk investments, and 30% bonds.

I would say junk bonds, EM bonds, and REITs may fall into this category.

[wintermute]

Preferred stock? Convertible bonds?

I used to use something like 80% ibonds/tips/cash 20% stock, for my efund, when bond yields were low.

sjnk, for example, has downside but limited upside.

[gavinsiu]

You answer your own question. You get better risk mitigation by holding multiple types of dissimilar assets. When one part of your portfolio is doing badly, another part is doing well. If you just hold one type of asset, you may hit upon a period of time when the asset is not in favor, which can last for years. Stock did poorly in 2000-2009, cash did poorly in 2009 to 2021, bond did poorly since around 2012. If you have a mix between stocks, bond, and cash and rebalance, it will smooth our your return. It won't eliminate loss, just reduce it. If you want 70/30, just get an asset allocation fund that approximate 70/30 stock/bond.

[KEotSK66]

I would have suggested convertibles too as wintermute did, so let me suggest something else...

There are balanced and multi-asset funds which have flexible mandates/AAs, they might range liberally between two limits. iow one day they might be 40/60 and at a later time 60/40, so you would be getting the flexibility I think you're looking for but that middle range would be under control of a manager/algorithm and so you'd reduce the risk of you making an asset class mistake...not that you would.

VG used to offer an excellent convertible fund, don't know if they still offer it though. (Convertibles are pretty cool.)

Good Luck.

[alex_686]

Public REITs do not. It has about the same level of risk and returns as other stock.

Maybe stocks that regress on the Quality or Low Volatility factors. These tens to have lower and stable earnings.

[nisiprius]

There are, but I see no need for special investments, or special subcategories of investments.

People often tout them as being "best of both worlds" when the actual performance is more like simply "mix of both worlds."

There are such investments, two being junk bonds and preferred stocks. But in the case of junk bonds, for example, I've yet to see a realistic "normal" retirement savings portfolio with junk bonds where you didn't get almost identical results by replacing the junk bonds with about ⅓ stocks, ⅔ bonds (like a "core" bond fund). Nothing's ever identical and fans of the in-between investments will point to small differences and claim they offer unique and uncorrelated return, but IMHO the claims are weak. I think it's complexification to create an appearance of sophisticated fine tuning.

In the case of junk bonds, I think one reason for their popularity is that they provide a means of goosing both risk and return at the same time without it being visible in the stock and bond percentages. The return is visible in the performance data. The fact that the junk bonds have stocklike characteristics is not. If you take a 60/40 portfolio and replace some of the investment-grade bonds with junk bonds, you might get something equivalent to 65/35, but it would still show up on asset allocation charts as 60/40.

If it's just a matter of convenience, you can buy "cake mix" products like balanced funds so you only have one line item to deal with.

[Thesaints]

… is there something I could invest in that carries a risk “in between” the two,

Yes. For instance, 50% cash + 50% stocks has exactly half the risk than 100% stocks.

[rkhusky]

Junk bonds. Utility stocks (VG’s Utilities ETF has a beta of 0.65, healthcare and consumer staples also have low beta), Balanced fund.

[gunny]

You can adjust your risk factor by simply adjusting your AA. No need for an "extra type" of investment.

[WoodSpinner]

OP,

I would put Buffered ETFs into the list.

Perhaps some FIAs or RILAs as well (although I would not invest due to complexity and fees)

WoodSpinner

[Tamalak]

Junk bonds pop to mind when I think about "middle risk". The problem is the risk junk bonds are exposed to are basically a mishmash of the same risks stocks and treasurys are exposed to (poor earnings vs duration risk). So you're not adding DIFFERENT KINDS of risk by adding junk bonds, unfortunately.

On the topic of junk bonds, does Vanguard really not have a junk bond ETF? Are they that opposed to the category?? It seems like a perfectly reasonable form of investment to me.

[delamer]

Stocks cover everything from emerging markets equities to US dividend “aristocrats.”

If your stock allocation covers the gamut of these options and your bonds include a range of durations, then you are adequately diversified.

[Legitimate-Engine]

On the topic of junk bonds, does Vanguard really not have a junk bond ETF? Are they that opposed to the category?? It seems like a perfectly reasonable form of investment to me.

No ETF, but Vanguard has junk bond MFs.

[TextualChocolate]

Managed Futures are interesting… returns between stock and bonds, but unsure how to quantify risk

[sid hartha]

There are, but I see no need for special investments, or special subcategories of investments.

People often tout them as being "best of both worlds" when the actual performance is more like simply "mix of both worlds."

There are such investments, two being junk bonds and preferred stocks. But in the case of junk bonds, for example, I've yet to see a realistic "normal" retirement savings portfolio with junk bonds where you didn't get almost identical results by replacing the junk bonds with about ⅓ stocks, ⅔ bonds (like a "core" bond fund). Nothing's ever identical and fans of the in-between investments will point to small differences and claim they offer unique and uncorrelated return, but IMHO the claims are weak. I think it's complexification to create an appearance of sophisticated fine tuning.

In the case of junk bonds, I think one reason for their popularity is that they provide a means of goosing both risk and return at the same time without it being visible in the stock and bond percentages. The return is visible in the performance data. The fact that the junk bonds have stocklike characteristics is not. If you take a 60/40 portfolio and replace some of the investment-grade bonds with junk bonds, you might get something equivalent to 65/35, but it would still show up on asset allocation charts as 60/40.

If it's just a matter of convenience, you can buy "cake mix" products like balanced funds so you only have one line item to deal with.

That's interesting. If you just hold a junk bond fund instead of a ⅓ stocks, ⅔ bond portfolio and the results are identical shouldn't bogleheads want do it because it's simpler? One fund vs two. To be honest I never really thought of it before.

[ScubaHogg]

Depending on what you mean by "bonds" you can always extend the duration to get more "risk"

[delamer]

There are, but I see no need for special investments, or special subcategories of investments.

People often tout them as being "best of both worlds" when the actual performance is more like simply "mix of both worlds."

There are such investments, two being junk bonds and preferred stocks. But in the case of junk bonds, for example, I've yet to see a realistic "normal" retirement savings portfolio with junk bonds where you didn't get almost identical results by replacing the junk bonds with about ⅓ stocks, ⅔ bonds (like a "core" bond fund). Nothing's ever identical and fans of the in-between investments will point to small differences and claim they offer unique and uncorrelated return, but IMHO the claims are weak. I think it's complexification to create an appearance of sophisticated fine tuning.

In the case of junk bonds, I think one reason for their popularity is that they provide a means of goosing both risk and return at the same time without it being visible in the stock and bond percentages. The return is visible in the performance data. The fact that the junk bonds have stocklike characteristics is not. If you take a 60/40 portfolio and replace some of the investment-grade bonds with junk bonds, you might get something equivalent to 65/35, but it would still show up on asset allocation charts as 60/40.

If it's just a matter of convenience, you can buy "cake mix" products like balanced funds so you only have one line item to deal with.

That's interesting. If you just hold a junk bond fund instead of a ⅓ stocks, ⅔ bond portfolio and the results are identical shouldn't bogleheads want do it because it's simpler? One fund vs two. To be honest I never really thought of it before.

No. It lacks diversification.

[sid hartha]

That's interesting. If you just hold a junk bond fund instead of a ⅓ stocks, ⅔ bond portfolio and the results are identical shouldn't bogleheads want do it because it's simpler? One fund vs two. To be honest I never really thought of it before.

No. It lacks diversification.

ah good point!

[jdibber]

You answer your own question. You get better risk mitigation by holding multiple types of dissimilar assets. When one part of your portfolio is doing badly, another part is doing well.

This is what RP AA is all about. I'm invested in LCG/SCV for equities, LT Treas for bonds, gold and managed futures.

[afan]

One could look at market neutral funds. Tend to be lower volatility than stocks and have near zero correlation with the market. But you are counting on the skill of the active manager to generate good returns. Note that, although they almost no correlation with stocks, they are not necessarily overall low volatility.

There are also low and minimum volatility funds. They really do have much lower vol than, say, the S&P500. But the performance may be unpredictable.

Adding something like junk bonds increases risk without a reason to expect increased risk adjusted returns

[MathWizard]

Short duration bonds generally get lower interest,
but have less interest rate risk.

Those could be a middle risk.

MYGAs limit downside risk, but limit upside potential.

CDs or Money Market Funds could be a third middle ground

[barberakb]

Real estate in my opinion fits that nicely for that type of investment

[Capster1]

Gold
Utilities/Consumer Staples sector ETFs. You’re taking on sector risks, but the volatility and max drawdowns have been less.

[Chardo]

Short duration bonds generally get lower interest,
but have less interest rate risk.

Those could be a middle risk.

MYGAs limit downside risk, but limit upside potential.

CDs or Money Market Funds could be a third middle ground

MYGA and CD are essentially identical.

[Valuethinker]

Junk bonds pop to mind when I think about "middle risk". The problem is the risk junk bonds are exposed to are basically a mishmash of the same risks stocks and treasurys are exposed to (poor earnings vs duration risk). So you're not adding DIFFERENT KINDS of risk by adding junk bonds, unfortunately.

On the topic of junk bonds, does Vanguard really not have a junk bond ETF? Are they that opposed to the category?? It seems like a perfectly reasonable form of investment to me.

I am pretty sure Vanguard USA has a High Yield Bond fund?

That is sub-investment grade bonds. AKA "junk" in the 1980s and 90s (I don't think the term is used much anymore).

I remember discussions a few years ago. It's definitely on the "quality" end of Sub IG bonds.

Note the academic research showed that "Fallen Angels" ie former IG bonds, were superior on a risk-return spectrum than "Original Issue" (OI) bonds.

OI bonds tend to a have a refinance provision (callable by the issuer) if Credit Rating goes to BBB- or above (ie IG). That means the risk for the investor is asymmetric on the downside.

They are also generally quite tax inefficient - as well as having equity risk.

You have to believe "Credit" is an orthogonal factor to equity risk (usually measured by beta). I am not sure the evidence really supports that (Larry Swedroe said no, Rick Ferri said yes).

[Valuethinker]

Let’s say you wanted to have a portfolio of around 70% stocks, 30% bonds, but is there something I could invest in that carries a risk “in between” the two, and what funds or ETFs would meet this need? So in the end, I could be 60% stocks, 10% middle risk investments, and 30% bonds.

I would say junk bonds, EM bonds, and REITs may fall into this category.

There's little evidence (that I have read about) that the risk in these types of assets is orthogonal to equity and fixed income risk. So you are not gaining anything on the risk-return Efficient Frontier.

What does Anti Illmanen say? He's the best reference, empirically, to different strategies/ asset classes (that I know of).

On Emerging Market bonds, whereas the classic USD EM bonds probably don't have any "special sauce", the "locals" ie bonds issued in those markets, in the home currencies, to domestic investors, could well do so. You'd be aligning yourself with the Brasilian or Indian or Indonesian economy, rather than world stock markets. At least in theory. There could be a diversification benefit in that.

However you would be taking on currency risk. The usual sensible strategy of an Emerging Market is to gently devalue against the USD. You don't want to be Argentina (fiscal and monetary incontinence) but you do want to increase your nation's exports against other nations. If you are a commodity producer (like UAE) this doesn't work -- the level of your currency doesn't have a big impact on your exports (both your costs of producing oil, and your sales revenues, are in USD). But if you are big, industrial, lots of population: India, Turkey, Brasil (a major commodities exporter but more agribusiness). Ofc, most EMs don't manage it - too easy to lapse into hyperinflation or economic meltdown.

So as an investor you could be taking on that risk.

[Valuethinker]

Preferred stock? Convertible bonds?

I used to use something like 80% ibonds/tips/cash 20% stock, for my efund, when bond yields were low.

sjnk, for example, has downside but limited upside.

Convertible bonds trade like what they are: a bond + a stock. There's no "special sauce". And companies which issue them are things like biotech companies - ie with high "option value". Tend to be very much on the riskier end of things - a less risky corporation will just issue debt, which does not dilute stockholders.

Preference shares similarly, and the predominant exposure is to financial services (+ some utilities) where regulators allow them as capital. So you've got very high correlation risk with financial crashes -- you'll all take the elevator to the sub basement together.

[KEotSK66]

Rather than looking for things between stock and bonds how about things to supplement stocks and bonds?

Many portfolios are stocks and bonds, end of story. Currently mine is.

I think a better approach is to consider the high inflation macro environment, which stocks and bonds may not properly address.

You would be looking at asset classes which have an inflation response, such classes should give a conventional stock+bond portfolio a fighting chance in high inflation. iow, all 4 combinations of growth vs inflation would be covered instead of just 2.

The downside is inflation-response classes tend to lag during good growth in low inflation, but this is typical of developed AAs.

[DonIce]

Gold. There's plenty of backtesting out there showing it has served as a good third assset to improve the performance of a stock/bond portfolio.

[unbiased]

I consider “risk” as an asset failing to meet a personal financial goal, whether short-term or long-term. Bonds are suitable for short-term goals but may face long-term inflation risk.

“Volatility” is traditionally considered a risk, but it’s only risky if volatile assets are needed for near-term spending. Some “non-correlated” assets reduce portfolio volatility and risk, but they can’t protect against a liquidity crisis like the 2020 U.S. Treasury market dry-up. Public markets become highly correlated during financial crises as everyone liquidates everything to raise cash.

If the main concern is “losing everything,” there’s very little middle ground between a contractual guarantee, like a bond, and other assets.

A possible “middle ground” area could be non-marketable securities, which involve issuer-specific risk like insurance products (annuities, DB pensions, MYGAs, etc.). These products have safety nets like PBGC and state guarantees. However, buyer beware. That's the best I got.

[prioritarian]

Bonds range from very high-risk (some emerging bonds, junk) to very low risk short-duration sovereign bonds. If someone wants to prioritize lower risk then investing in shorter duration treasuries/sovereigns can serve this purpose (albeit with lower expected returns and less diversification benefit).

There are also plenty of alternatives that may lower the risk of owning stocks via a lack of correlation (but tend to be far "riskier than sovereigns).

[jec1ny]

One possible solution would be some combination of preferred and dividend growth stocks. They are still stocks, but will likely give you a bit more income in exchange for a lower rate of capital appreciation. This seems to be at least part of the thinking behind dividend investing. VIG/VIGI/SCHD/VYM/VYMI... are all well rated funds.

A lot of bogleheads also like VWIAX which offers an income oriented fund that is around 2/3 bonds and 1/3 dividend stocks. It has delivered a moderate level of both income and growth over time with significantly lower volatility than the S&P 500.

[Thesaints]

…and yet everyone here is happy with only two hoses connected to their tap: they can get water cold, hot, and at any intermediate temperature without the need of multiple, dedicated, hoses…

[psteinx]

A rough attempt at a ~risk spectrum:

T-bills
Short T-Bonds (2-5 years or so)
~10 year T-Bonds
High grade corporate bonds, not too long (~5 years)
High grade preferreds and maybe junk bonds and maybe some foreign sovereigns
(Substitute TIPS in the above for inflation protection, as desired, or munis in some cases)
=== All of the above (except preferreds) have a definite, not-too-far-off maturity date
=== Stuff below has indefinite maturity date, and risk of variation in the underlying earnings that support dividends/cash flow/value growth, PLUS given the longer duration, more risk from interest rates
Unlevered real assets - real estate, farmland, maybe some non or lightly levered REITs
Utility stocks, standard (leveraged) REITs and a few other high dividend stocks (the high dividends effectively shorten the duration, and generally these kinds of things have PE ratios not TOO high...)
Broad US market stocks (can reduce risk some with covered call strategies, but I don't especially recommend it)
International stocks & maybe US growth stocks
Leveraged versions of the above

---------------------

The easiest way to manage risk is, IMO, on the bond side, and in the % allocation to bonds (& cash)/stocks

[JBTX]

I have some funds like vanguard dividend growth and a few low/minimum volatility funds in an attempt to mitigate some of portfolio risk. A utility stock fund, depending on what is included in the fund, may be lower risk.

[garlandwhizzer]

The motive for switching from 70/30 to a 10% middle risk investment 60/10/30 presumably is to decrease risk and volatility relative to 70/30 while improving expected long term returns so they are in excess to a 60/40. A couple points to be made here.

First, the simplest way to achieve that stated goal is simply to modify 70/30 by modestly decreasing stock exposure relative to bonds, say 65/35 for example. This allows you to flexibly adjust your stock/bond balance to fit exactly where your personal tradeoff lies between maximizing long term returns with stocks) and maximizing expected volatility reduction plus improved overall portfolio diversification with bonds. Furthermore, if you equity is in very widely diversified index funds including both growth and value, small, mid, and large cap weight slices of US and INTL equity markets there is considerable diversification already built into your equity position. If your equity is all in the Magnificent 7 which has been a big winner for high returns with high volatility to the upside, you're at much increased risk and need to broaden equity exposure. All of the Mag 7 pluses can reverse into big time negatives at an unexpected point in time. They stand on lofty perches and it's a long way down to the ground if the mega-cap growth train derails.

The second point to be made here is that going forward from here expected returns from quality bonds are expected to be much higher than they have been in the last 3+ years which has included a severe bond bear market. On the other hand, stocks have been on a magnificent bull run during that time and their expected returns going forward from current levels are expected to be lower than what we've gotten used to. In short the expected forward return differential between stocks and bonds has narrowed while the expected future risks and volatility between the two has improved in favor of bonds. Vanguard's future return projections show this change glaringly. IMO Vanguard has once again overdone it, underestimating future US LC stock performance and likely overestimating INTL's returns relative to US. However I do believe the basic premise that better days are ahead for bonds and less happy days are ahead for stocks relative the the recent past years. Recency bias can get you into trouble if you put too much faith in it. So, IMO it may not make much difference if you 60/40 or 70/30, but personally I would avoid adding a middle risk investment type. If it ain't broke, don't fix it.

The only qualification I would add to the above is: if you're significantly concerned about the possibility of stagflation going forward, consider adding a modest allocation to GLD as a diversifying asset. Gold's diversification benefit only works in severe events. Few investors today remember the stagflation of the late 1990s and the deep bear market that followed it when interest rates were suddenly raised to 15%. I do remember that disaster and gold, which usually goes nowhere in real terms for decades, can skyrocket when everything else fails. I do not think we'll go into stagflation but it is a real possibility. Policy mistakes can ignite it.

Garland Whizzer

[psteinx]

Few investors today remember the stagflation of the late 1990s and the deep bear market that followed it when interest rates were suddenly raised to 15%. I do remember that disaster and gold, which usually goes nowhere in real terms for decades, can skyrocket when everything else fails. I do not think we'll go into stagflation but it is a real possibility. Policy mistakes can ignite it.

Garland Whizzer

I don't remember it because I don't think it happened (15% interest rates in the late 90s/early 00s). Could you clarify what you're referring to?

[renter]

If you search Vanguard funds, you'll find Vanguard Total Stock Index has a risk level of 4 and Vanguard Total Bond Index has a risk level of 2. Search there for funds with a risk of 3.

[exodusing]

Short duration bonds generally get lower interest,
but have less interest rate risk.

Less interest rate risk is at the cost of more reinvestment risk (and income variability risk). The risk-free bond (or at least lowest risk bond) for a long-term investor is a long-term inflation adjusted bond.

[alluringreality]

Few investors today remember the stagflation of the late 1990s and the deep bear market that followed it when interest rates were suddenly raised to 15%. I do remember that disaster and gold, which usually goes nowhere in real terms for decades, can skyrocket when everything else fails. I do not think we'll go into stagflation but it is a real possibility. Policy mistakes can ignite it.

Garland Whizzer

I don't remember it because I don't think it happened (15% interest rates in the late 90s/early 00s). Could you clarify what you're referring to?

I'd presume with the stagflation label, the intent may have been rates from the late 1970s or early 1980s.
https://fred.stlouisfed.org/graph/?g=1DjHh

[Valuethinker]

The only qualification I would add to the above is: if you're significantly concerned about the possibility of stagflation going forward, consider adding a modest allocation to GLD as a diversifying asset. Gold's diversification benefit only works in severe events. Few investors today remember the stagflation of the late 1990s and the deep bear market that followed it when interest rates were suddenly raised to 15%. I do remember that disaster and gold, which usually goes nowhere in real terms for decades, can skyrocket when everything else fails. I do not think we'll go into stagflation but it is a real possibility. Policy mistakes can ignite it.

Garland Whizzer

I wondered for a minute which Alternate History you had been reading ... was that the one where Patton became President?

Few investors today remember the stagflation of the late 1990s and the deep bear market that followed it when interest rates were suddenly raised to 15%

Then I realised that you meant "Late 1970s"...

Interest rates peaked at 21% from memory (the Fed Funds rate). But that would have been in 1980. The precipitate even was the Iranian Revolution of 1979, when the price of oil went from $12/bl to $40/bl.

EDIT: looks like 19% https://fred.stlouisfed.org/graph/?g=1DjHh must have been a different currency I was thinking of (CAD or GBP).

The bear market was really bad in 1972-74 around the time of the First Oil Crisis and the Watergate. It dropped about -50% from memory. In the UK it dropped -82% (in real terms, inflation was over 20% pa).

I don't recall 1979-80 being quite as bad as that. Albeit it was not fun.

Gold prices in the 1970s are tricky, because they were decontrolled in 1971. What is true is that gold peaked in 1980 (from memory) at over $1000/oz and then fell for the next 30 years. So you do have to be on that escalator early, or not at all.

[Target2019]

Utilities and/or Consumer Staples sectors have the lowest beta. Will that work going forward? You would find out...

[garlandwhizzer]

Sorry about the error in my post, writing 1990s when I meant 1970s, the era of ever increasing inflation and stagnant real economic growth. It was a tough time for investors--4 decades of bond losses in real terms 1940 - 1980 and stocks also suffered badly in real terms for almost 15 years. In 1982 "the death of equities" was announced by a major publication. That was the point of maximal pessimism in a nasty bear market induced by raising interest rates raised so high it created unemployment and finally killed inflation. Ironically that was also the point when the greatest bond bull market started which would last uninterrupted for 38 years of ever decreasing rates and inflation. Also, the start of a tremendous series of stock bull markets interrupted by occasional brief corrections that went on for 18 years until the dot com bust. Gold far outperformed stocks and bonds during stagflation, but after the tide changed abruptly in 1982 it underperformed substantially for decades. So it goes with gold. When the bottom falls out of everything, gold shines. When traditional stock and bond assets boom, gold is a loser. It provides a reliable store of value only in severe circumstances when everything else fails. BTC has been touted as digital gold which is part of the reason it, like gold have skyrocketed in the past year. I believe some investors are concerned about how long this great party can go on before it the music stops playing.

Garland Whizzer

[bobcat2]

Let’s say you wanted to have a portfolio of around 70% stocks, 30% bonds, but is there something I could invest in that carries a risk “in between” the two, and what funds or ETFs would meet this need? So in the end, I could be 60% stocks, 10% middle risk investments, and 30% bonds.

I am not necessarily recommending this for your 10% middle risk investment, but a covered call strategy either DIY or etf would be a fit for an in-between uncovered stock risk and bond risk.

BobK

[Valuethinker]

Sorry about the error in my post, writing 1990s when I meant 1970s, the era of ever increasing inflation and stagnant real economic growth. It was a tough time for investors--4 decades of bond losses in real terms 1940 - 1980 and stocks also suffered badly in real terms for almost 15 years. In 1982 "the death of equities" was announced by a major publication. That was the point of maximal pessimism in a nasty bear market induced by raising interest rates raised so high it created unemployment and finally killed inflation. Ironically that was also the point when the greatest bond bull market started which would last uninterrupted for 38 years of ever decreasing rates and inflation. Also, the start of a tremendous series of stock bull markets interrupted by occasional brief corrections that went on for 18 years until the dot com bust. Gold far outperformed stocks and bonds during stagflation, but after the tide changed abruptly in 1982 it underperformed substantially for decades. So it goes with gold. When the bottom falls out of everything, gold shines. When traditional stock and bond assets boom, gold is a loser. It provides a reliable store of value only in severe circumstances when everything else fails. BTC has been touted as digital gold which is part of the reason it, like gold have skyrocketed in the past year. I believe some investors are concerned about how long this great party can go on before it the music stops playing.

Garland Whizzer

Discussion of cr*o is not permitted by Forum rules.

Gold one has to be careful. Because the price was controlled until 1971. Then it staged a massive "catch up" then it didn't. So, arguably, something of a warrant on inflation - rising inflation leading to an outperformance by the gold price, falling inflation the opposite.

It is unclear whether it still serves as a refuge in bad times. I don't think it did in 2008?

William Bernstein has that piece "The most patient asset" or something of that nature (on Efficient Frontier website). Which was the "gold zigs when everything else is zagging" piece. But I don't know if that is still true.

In recent times, gold has tended to move the inverse of real interest rates. That seemed to be the pattern at least up until 2022. Market Timer had quite a nice graph of this.

It's probably true it is something of a refuge for political instability. But more in places like Iran (where the official currency is highly inflationary) than in countries with free capital markets. Maybe now, as political instability has arguably spread to developed countries.

I note that in the UK Nigel Farage, political leader of the Brexit movement and the Reform Party now, has a major sideline in promoting gold for a broker. Read into that what you will.