There are probably no more eye-catching performance trends to follow than technology shares and gold currently. We saw gold reaching parabolic highs of almost $5 600 at the end of January while technology companies faltered in their eye-watering run of the last five years. In our blog on the 19th of January titled “Precious metals are soaring, should you be chasing it”, we noted that although there are structural reasons why gold is going up, it remains a cyclical asset class and when the main driver of the buying spree stops – i.e. central banks stop buying – the speculative retail investor might start selling. We concluded that having an increased exposure to them is not necessarily a bad thing, but that selling high-quality international companies not tied to the cyclical nature of these metals, is perhaps not the best idea.
If we look at what has happened since then, we see the technology companies performing well; and gold as well as other metals going down a lot. It must be noted that there is a very crazy thing happening when we look at the technology shares. The main driver of the performance hasn’t been the big well-established companies like Alphabet (+8% ytd), Amazon (+3% ytd), Microsoft (-22% ytd), Meta (-5% ytd) and Nvidia (+7% ytd), but a niche segment of the technology sector called memory chips. The performance of these companies has been utterly insane. We only have to look at the ytd performance of SanDisk +493%, Micron +271% and SK Hynix +154% to understand that this too will not last forever.
If you are an investor with a concentrated portfolio that doesn’t include these overachievers, you might be disappointed with your relative performance for 2026. If you started investing in gold and silver at the beginning of the year, you are probably sporting a frown at this stage and if you added bitcoin (-30%) in January, you are definitely not having a good year. In times like these you should step out of the detail and consider the elevated view of your situation. It seems that the war in Iran has settled down and Donald Trump’s ego has been cut down to size, preventing him from rushing into situations where he has no control over the possible outcome. With the price of oil falling like a stone, we can expect inflation to come down over the next few months, making the cutting of interest rates a possibility and stimulating the economies, which will be positive for share prices.
In the absence of any major catastrophes, we can expect to see some sense of normality returning to equity markets. Remember, over time equities outperform inflation by around 6%. If inflation is 3% and your portfolio return is 9%, you are doing okay. The tricky bit going forward is to predict where gold and bitcoin will stabilize. It is likely that without the distraction of war and high oil prices, countries like China, Russia and Iran will resume their buying of gold to build up their reserves to counter their reliance on the dollar. It is also possible for bitcoin to do what it always does, which is bounce back to new highs after a 50% correction. But, unlike the very probable positive performance of equities driven by earnings growth, gold and bitcoin will remain unpredictable with nothing fundamental to support them.