Quarterly Outlook
Q1 Outlook for Traders: Five Big Questions and Three Grey Swans.
John J. Hardy
Global Head of Macro Strategy
Chief Investment Strategist
If you’ve been watching markets lately and thinking, “Why is everything moving at once?” — you’re not alone.
The recent drop in silver and precious metals matters beyond metals itself because sharp moves in a “big, liquid” market can spill over into other assets. Here’s the investor-friendly version of what’s going on:
So even if you don’t own silver, a sharp move in metals can still show up as wider swings across portfolios.
For long-term investors, the key is not to get pulled into the “everything is breaking” narrative. Selloffs are stressful, but they’re also revealing: they show where process is strong — and where behaviour can cause avoidable damage.
Here are three common mistakes selloffs expose — and the simple mindset shifts that help avoid them.
Sharp price moves look like information — but speed doesn’t equal significance.
Metal selloffs can be driven by short-term forces:
These drivers can dominate for days or weeks without changing the longer-term role metals may play as a diversifier.
A useful discipline:
Before acting, write one sentence:
“What changed, and will it still matter in 6–12 months?”
If you can’t answer clearly, the move is probably market mechanics, not a structural verdict.
Gold and silver are often treated as “stability assets,” but in stressed markets they can drop sharply — especially when:
That doesn’t mean diversification failed. It means stress changes behaviour: investors sell what’s liquid.
The real test:
If a 10–20% swing forces an emotional decision, the issue is usually position size, not asset choice.
This is the most damaging mistake — and the most common.
Many long-term investors sell during selloffs not because their thesis changed, but because discomfort did. The idea is often “I’ll re-enter later,” but re-entry rarely happens cleanly — and markets don’t ring a bell when the dust has settled.
Volatility turns temporary moves into permanent portfolio decisions.
A better response:
If an asset still belongs in a long-term plan, the question is often how much, not whether.
The most resilient portfolios are rarely exciting. They’re built around:
Selloffs are less a test of market knowledge and more a test of discipline. Consistency usually matters more than conviction.
If you bought metals as part of a multi-year strategy:
The investors who compound successfully over time are not the ones who avoid every drawdown — they are the ones who avoid turning drawdowns into decisions they can’t undo.