Soaring gold prices in recent months prove that commodities can generate notable outperformance, but traders shouldn't put all their eggs in one basket. Winning in a volatile market means spreading out your wealth, according to one market expert.
"When it comes down to buying gold or selling crude oil or buying a Nasdaq index, (I use) zero economics," Tom Basso, enjoytheride.world founder and author of "The All-Weather Trader" told Investor's Business Daily's "Investing with IBD" podcast. "I look at the price, I look at which way it's going, and I go with that direction."
Gold Prices Fuel Portfolio Gains
Gold prices have fueled outperformance for investor portfolios in 2025, highlighting the shiny metal's safe-haven status amid ongoing market uncertainty fueled by President Donald Trump's shifting tariff policies.
The SPDR Gold Shares ETF, GLD, broke out of a two-month consolidation in late January and has advanced some 20% since. That sharp advance now means gold is considered too extended for a new entry at current levels. But existing holders of gold are sitting pretty for the time being.
"My biggest winner was gold," Basso said on Wednesday's podcast. "I'm long gold for a long time, I'm long silver, platinum, long copper, long aluminum. All the metals, that's where I made most of my money today."
But he says a winner one day may not be a surefire bet the next. "You just spread it around," he said. "You've got so many different things happening in the portfolio that you're going to have some win and some lose."
That's especially helpful in a volatile market. With headline risk ever present, investors could flee safe havens like gold and move to more risk-on assets if and when the trade war drama is resolved.
Audio Version Of Podcast
How To Manage Portfolio Risk
To maintain a properly managed portfolio, Basso says traders should always adjust their position sizes in proportion to market volatility. For instance, a trader that buys 100 shares of a stock and is seeing four times more volatility than normal should consider reducing their position size to 25 shares, according to Basso.
"Start with the market, start with prices, start with indicators and strategy, and say if I were to buy one share, how much risk is logical for this one position," he said.
By taking only proportional risks, Basso says investors can keep a manageable exposure with each position.
Behavioral economics also has its place in how Basso considers changes in gold prices, other commodities and even tariffs, with market participants' reactions often more important than the proximate cause itself.
"I would ask myself not the direct math of a tariff. I would say, 'What would be the behavioral aspect of how everybody in the picture would be affected and react to tariffs?'" he said.
Follow Mike Juang on X at @mikejuangnews and on Threads at @namedvillage.
