In the run-up to the reversal of many of President Trump’s tariffs, we saw some true panic selling that turned into what can only be called panic buying: Investors eager to get back in as they realized the selloff was a buying opportunity.
And to no one’s surprise, tariff-related market drama has continued since then.
Last Wednesday’s bounce happened so fast I couldn’t get my response to the selloff published in time. Earlier last week I wrote, “Fortunately, this situation will not last forever. Stocks will ultimately recover their losses from this last week.” Then stocks did recover before those words could get published!
But the key thing to keep in mind is that, over time, stocks do move higher (though they don’t often post a single-day bounce as high as the one we saw last Wednesday!). So buying oversold stocks (and especially deep-discounted high-yield closed-end funds, or CEFs, like those in the portfolio of our CEF Insider service) and sticking with them through market turmoil is a smart move every single time.
After all, losses in the S&P 500 do disappear over time. They’ve done it after every single crash we’ve experienced before.
And there’s an important, but less obvious, fact about this that investors aren’t considering as much as they should: how this situation has affected two of the so-called “safe havens” that have been getting a lot of attention lately: gold and Treasury bonds.
First, let’s look at how index funds tracking the S&P 500 (in purple below), gold (in orange), long-term Treasuries (in blue) and short-term Treasuries (in green) were doing before last Wednesday’s bounce.
Everything Was Crashing
I don’t need to tell you what’s happening in this chart: Trump’s very high tariffs were expected to cause two things: higher prices on goods (since those tariffs will be paid by importers, who will raise prices on the products consumers buy) and slower consumer spending (again, because of those higher prices).
As a result, most Wall Street firms raised their expectations of a recession in 2025. (For the record, I raised my expectations of a recession a month ago, so I’m glad to see the media and analysts finally come around.)
The chart above ends at the close of trading on April 8. Now, when we fast forward the tape to the close of trading on April 9, we see that all of these assets recovered, for the most part, with the S&P 500 seeing the most dramatic recovery of them all.
Stocks, Treasuries and Gold All Bounce
Note that gold surged too, and has continued to do so since. This, again, tells us that there is still some worry in the market about inflation, but the bigger question is: Is gold a good hedge? Should one have gold in one’s portfolio over the long term to protect against downturns like this?
To answer that question, let’s zoom out.
Gold’s Long-Term Showing
We see that, in the last decade, gold outperformed short-term Treasuries by a huge margin and did much better than long-term Treasuries, even considering their interest payments (these are total-return values, including all dividends and other income). Long-term government bonds actually lost money.
And these returns are all before we account for inflation. So much for Treasuries as a safe haven!
The underperformance of short-term Treasuries makes sense. After all, these bonds are liquid and, as you can see from that straight green line, low volatility. That leads us to a couple of takeaways around safe havens.
First up: Long-term US bonds are not a good hedge.
But did gold give us anything in exchange for underperforming stocks? If Treasuries aren’t a good way to diversify away from the aches of the market, is gold?
Well, gold collapsed alongside stocks between the time Trump announced his tariffs and his announcement reversing most of them. So in this case, the answer is no.
But over the long term, gold is also clearly not a great hedge, since it underperforms stocks. In other words, if you have it in your portfolio to hedge your stocks, it just means it’ll drag down your returns. Let’s drill into this point a bit.
Stocks Crush Gold
If we go back 33 years (the earliest data I can easily chart for you), gold had a 6.9% annualized return, as of this writing, while stocks had returned 9.9% annualized. Compound interest means that this difference adds up: For every $10,000 you invested in stocks, you ended up with over $133,000 more in pure profits from stocks than from gold over this time period.
So, our second takeaway around “safe havens” writes itself at this point: Investing in gold will drag down your returns over the long term. And today is a particularly dangerous time to hold gold.
Gold’s Unusual Run-Up
Over the last three years, gold has massively outperformed stocks, with a 17.2% annualized return versus 7% for stocks. This makes sense, considering that the run-up over the last three years began when inflation spiked. Inflation worries have crowded the headlines ever since.
However, remember that gold’s long-term annualized return is 6.9%, meaning it’s outperforming the past by over double. Stocks, however, are underperforming their long-term average.
This means that, not only will investing in gold drag down returns in the long term, but gold is currently overpriced relative to its long-term trendline, and it is likely to revert to the mean. Stocks, on the other hand, are underpriced relative to their long-term trendline, and are likely to revert to the mean, as well.
The Market’s in Turmoil—but These 9.5% “AI-Powered” Dividends Are Made for It
Tariffs are on. Tariffs are off. Stocks are volatile. And as we saw above, so-called “safe haven” trades are no help.
So what I’m about to say might sound strange: Your best move now is to … buy high-yielding closed-end funds focused on artificial intelligence.
These funds are viciously oversold now, and their dividend yields have soared as a result: In fact, the four AI funds I’m urging investors to buy amid the tariff turmoil are quietly spinning off yields up to 12%. Taken together, they kick out an incredible 9.5% average dividend yield.
Better than sitting in cash. Better than chasing shaky bonds.
In my newest briefing, I’ll tell you more about these 4 deeply discounted AI-powered funds, which are built for conservative income investors. I’ll also give you a free Special Report revealing all four of these funds’ names and ticker symbols.
These aren’t blue-sky speculations. Each fund is anchored in real assets and real cash flow that is then boosted by the strategic use of artificial intelligence to cut costs, manage risk and deliver reliable income.
That’s the kind of innovation we like: the kind that pays us.
And right now, with stocks still oversold and headlines screaming recession, these funds are trading at rare discounts.
But timing is critical. As Wall Street wakes up to the power of these AI-driven funds, the discounts—and the outsized yields—will vanish.
Don’t miss out. Click here to get the full story on these 9.5%-paying AI funds and download your free Special Report revealing the details on each of them, now.