By Jena Aldredge

Precious metals have long occupied a unique position in the global financial system. For thousands of years, they have functioned as money, as symbols of wealth, and as perceived safe havens in times of uncertainty. From ancient empires to modern nation-states, gold and silver in particular have been intertwined with war, peace, inflation, and geopolitical tension.

Understanding how precious metals behave during times of war and peace can help investors, policymakers, and individuals make more informed decisions. While no asset class is immune to volatility, precious metals often reflect shifts in confidence, stability, and risk perception more directly than many other financial instruments.

Precious Metals in Times of War

Historically, war introduces instability—economic, political, and monetary. Governments increase spending dramatically, often through debt issuance or currency expansion. Inflation fears rise. Supply chains are disrupted. Currency values fluctuate. Under these conditions, precious metals tend to attract capital.

1. Gold as a Safe Haven

Gold has traditionally performed strongly during periods of geopolitical conflict. During World War I and World War II, gold retained purchasing power while many paper currencies experienced devaluation. In the 1970s—amid the Vietnam War, oil shocks, and stagflation—gold prices rose sharply after the collapse of the Bretton Woods system.

More recently, during conflicts such as the Gulf War and the early stages of the Russia–Ukraine war, gold prices initially spiked as investors sought safety. The logic is straightforward: when uncertainty rises, investors often move away from risk assets like equities and toward perceived stores of value.

Gold’s role as a hedge stems partly from its physical nature. It is not tied to the creditworthiness of a government or corporation. It is finite, tangible, and globally recognized.

2. Silver’s Dual Nature

Silver behaves differently from gold. While it shares monetary characteristics, it also has significant industrial uses. During wartime, industrial demand can increase due to manufacturing needs, electronics, and military technology.

However, economic slowdowns tied to war can reduce broader industrial demand.

As a result, silver can be more volatile than gold. It may rise sharply in early crisis phases but fluctuate depending on the broader economic outlook.

3. Inflation and Currency Debasement

Wars are expensive. Governments often finance them through borrowing or expanding the money supply.

Historically, this has led to inflationary pressures. During inflationary periods, precious metals have often preserved purchasing power better than fiat currency.

For example, after the United States suspended gold convertibility in 1971 under President Richard Nixon, inflation surged through the decade. Gold prices increased dramatically as confidence in paper currency weakened.

Precious Metals in Times of Peace

Periods of peace and economic expansion present a different environment.

1. Stability and Risk Appetite

In stable, low-conflict periods, investors typically favor growth assets—stocks, real estate, private equity. Precious metals may underperform during long bull markets in equities because they do not produce income, dividends, or earnings growth.

For example, during the tech boom of the 1990s, gold prices stagnated while equities soared. In strong economic cycles with low inflation and stable geopolitics, the opportunity cost of holding gold increases.

2. Central Bank Policy and Interest Rates

Peaceful periods often coincide with stable monetary policy and controlled inflation. When interest rates are high and stable, holding non-yielding assets like gold becomes less attractive relative to bonds.

However, if central banks adopt loose monetary policies—even in peacetime—precious metals can still perform well. The 2008 financial crisis, though not a war, demonstrated that economic instability alone can drive strong gold performance.

3. Long-Term Wealth Preservation

Even in times of peace, precious metals are often held as long-term wealth insurance. They may not generate explosive returns, but they serve as portfolio diversifiers.

Many institutional investors allocate a small percentage of portfolios to gold to hedge against systemic risk.

The Cyclical Nature of Performance

Precious metals do not move in straight lines. Their performance depends on:

• Real interest rates
• Currency strength (particularly the U.S. dollar)
• Inflation expectations
• Geopolitical tension
• Market sentiment

During war, fear often dominates. During peace, growth and productivity take center stage. Gold and silver tend to thrive when fear, uncertainty, or monetary instability outweigh optimism.

Top Seven Things to Keep in Mind About Precious Metals Whether considering precious metals during war or peace, these seven principles are essential.

1. Precious Metals Are Insurance, Not Just Investments
Gold in particular functions more like financial insurance than a growth stock. It protects purchasing power during extreme scenarios—currency collapse, sovereign debt crises, or geopolitical instability.

Insurance does not always pay out. But its value becomes apparent when disruption occurs.

2. Interest Rates Matter More Than Headlines
While war headlines often trigger short-term price spikes, long-term performance is more closely tied to real interest rates (interest rates adjusted for inflation).

When real rates are negative—meaning inflation exceeds interest rates—gold tends to perform well. When real rates are positive and rising, gold often struggles.

Investors should monitor central bank policy decisions and bond yields as closely as geopolitical developments.

3. The U.S. Dollar Plays a Central Role
Because gold is priced globally in U.S. dollars, dollar strength or weakness significantly impacts prices. A strong dollar can suppress gold prices even during moderate geopolitical tension. Conversely, a weakening dollar can boost gold in relatively calm periods.

Currency dynamics are particularly important during global conflicts that reshape trade relationships or sanctions regimes.

4. Volatility Is Normal
Precious metals can experience sharp price swings. During crises, prices often spike quickly, then retrace once initial fear subsides.

For example, at the onset of major geopolitical events, gold may surge, but if markets stabilize or central banks intervene, prices may correct.

Investors should expect volatility and avoid assuming a straight upward trajectory during conflict.

5. Physical vs. Paper Exposure Matters

There are multiple ways to invest in precious metals:
• Physical bullion (coins and bars)
• Exchange-traded funds (ETFs)
• Mining stocks
• Futures contracts

Physical gold offers direct ownership but requires storage and security. ETFs offer liquidity and convenience. Mining stocks add operational and management risk. Each behaves differently during war and peace.

For example, mining operations may face geopolitical risk if located in unstable regions.

6. Diversification Is Key

Precious metals should typically represent a portion—not the entirety—of a diversified portfolio. Even during prolonged conflicts, other assets such as energy stocks, defense companies, or certain commodities may outperform.

During peaceful expansion, equities often deliver higher returns over long horizons.

Balance is critical.

7. Human Psychology Drives Demand

Ultimately, precious metals reflect collective psychology.

Fear, trust, uncertainty, and confidence shape capital flows.

During war, fear of currency debasement and systemic collapse drives buying. During peace, confidence in economic growth reduces urgency.

Markets often move ahead of events. By the time conflict escalates, prices may already reflect anticipated risk.

Understanding sentiment shifts can be as important as analyzing supply and demand fundamentals.

War, Peace, and Structural Change

It is also important to recognize that not all wars or peaceful periods are alike. Modern financial systems are more complex and interconnected than in previous centuries.

Digital currencies, algorithmic trading, and global capital mobility can amplify or dampen traditional patterns.

Central banks now hold significant gold reserves as part of diversification strategies. In recent years, some emerging market central banks have increased gold purchases to reduce reliance on the U.S. dollar system.

This structural demand can influence prices independent of immediate conflict.

The Long View

Over centuries, precious metals have preserved value through empires rising and falling, currencies being created and destroyed, and financial systems evolving.

During war, they often provide stability when paper systems are stressed. During peace, they may lag growth assets but continue serving as long-term stores of value.

The key is perspective. Precious metals are neither magic crisis shields nor obsolete relics. They are strategic tools whose performance depends on context.

Investors who understand how gold and silver respond to interest rates, inflation, currency strength, and geopolitical uncertainty are better positioned to use them wisely.

In uncertain times, precious metals often shine brightest. In stable times, they quietly wait. Their enduring appeal lies not in constant outperformance, but in resilience across both war and peace.

By Flint Jurgens

Real estate has long been considered one of the most powerful vehicles for building wealth. From generating passive income to long-term appreciation and tax advantages, property ownership can create opportunities that few other asset classes offer. Yet, getting into real estate as an investment is far more complex than simply purchasing a property and waiting for its value to rise. Success requires strategy, research, financing preparation, professional guidance, and a deep understanding of potential risks.

Whether you’re considering rental properties, house flipping, commercial real estate, or real estate investment trusts, there are numerous pathways into the industry—each with its own benefits and pitfalls. Understanding what to keep in mind before diving in can make the difference between a profitable venture and a costly mistake.

Understanding the Different Investment Pathways

Real estate investing is not one-size-fits-all. Investors can choose from several avenues, depending on their goals, risk tolerance, and available capital.

1. Residential Rental Properties

Owning single-family homes, duplexes, or small multifamily properties is one of the most common entry points. Investors purchase property and lease it to tenants, generating monthly income while potentially benefiting from appreciation over time.

Pros:
• Steady cash flow
• Property appreciation
• Tax advantages (depreciation, expense deductions)

Cons:
• Tenant management challenges
• Maintenance costs
• Market fluctuations

2. House Flipping
Popularized by television shows and rising home values in cities like Los Angeles and Miami, house flipping involves purchasing undervalued properties, renovating them, and reselling at a profit.

Pros:
• Potential for large short-term gains
• No long-term tenant responsibilities

Cons:
• High upfront costs
• Renovation risks
• Market timing sensitivity

Flipping requires strong market knowledge, reliable contractors, and precise budgeting. Underestimating renovation costs is one of the most common pitfalls.

3. Commercial Real Estate
Investing in office buildings, retail spaces, or industrial properties can offer higher income potential and longer lease terms.

Pros:
• Larger income streams
• Long-term leases
• Professional tenants

Cons:
• Higher entry costs
• Greater economic sensitivity
• Complex legal structures

4. Real Estate Investment Trusts (REITs)
For investors who want exposure to real estate without directly owning property, REITs offer a more passive alternative. Publicly traded REITs can be purchased like stocks and may provide dividends tied to property income.

Pros:
• Liquidity
• Diversification
• Lower capital requirements

Cons:
• Market volatility
• Limited control

The Importance of Financial Preparation

Before purchasing any property, financial readiness is critical. Lenders assess credit score, debt-to-income ratio, employment stability, and available reserves.

Getting Pre-Approved

A mortgage pre-approval is not merely a formality—it is a strategic advantage. During pre-approval, a lender verifies financial documents and determines how much you qualify to borrow. This:

• Clarifies your budget
• Strengthens your offer
• Speeds up the closing process

In competitive markets such as Austin or Denver, sellers often prioritize buyers who are already pre-approved. Investors should also consider:

• Down payment requirements (often higher for investment properties)
• Interest rate differences for non-owner-occupied homes
• Reserve requirements (some lenders require 6–12 months of mortgage payments in reserve)

Failing to secure pre-approval before shopping can lead to disappointment and lost opportunities.

Conducting Thorough Market Research

Real estate is hyper-local. National trends matter, but neighborhood dynamics often determine profitability.

Key factors to research include:

• Job growth and economic development
• Population trends
• School districts
• Infrastructure projects
• Rental demand
• Comparable property sales (comps)

For example, cities experiencing tech expansion, such as Seattle, may see stronger rental demand. However, rapid growth can also drive prices up, reducing cash flow margins.

Investors must analyze both appreciation potential and cash flow. A property that appreciates rapidly but generates negative monthly income may not suit someone seeking passive cash flow.

Property Inspections: Protecting Your Investment

Never skip the inspection. A professional home inspection can uncover structural issues, roofing problems, plumbing defects, foundation cracks, mold, electrical hazards, or pest infestations.

Even new construction should be inspected. Hidden defects can cost tens of thousands of dollars if discovered after closing.

Beyond general inspections, investors may consider:

• Termite inspections
• Sewer scope inspections
• Environmental assessments (for older or commercial properties)

An inspection report provides leverage for negotiating repairs or price reductions. Skipping this step to “win” a bidding war can lead to catastrophic expenses later.

Understanding Disclosures and Due Diligence

Sellers are legally required in most jurisdictions to disclose known material defects. Disclosures may include:

• Water damage
• Structural issues
• Past insurance claims
• Environmental hazards
• Boundary disputes

However, disclosures rely on the seller’s knowledge.

Independent research remains essential. Investors should review:

• Property tax history
• Zoning restrictions
• HOA rules
• Title reports
• Permitting records

Failure to conduct thorough due diligence can result in unexpected legal or financial complications.

The Closing Process Explained

Once your offer is accepted, the transaction enters escrow. The closing process typically includes:

1. Earnest money deposit
2. Final loan underwriting
3. Title search and title insurance
4. Appraisal
5. Final walk-through
6. Signing closing documents
7. Funding and recording

An appraisal protects the lender by confirming the property’s market value. If the property appraises below the purchase price, you may need to renegotiate or increase your down payment.

Title insurance protects against undiscovered liens or ownership disputes. Without clear title, your investment could be jeopardized.

Closing costs typically range from 2% to 5% of the purchase price and include lender fees, title insurance, escrow fees, and taxes.

Pitfalls to Avoid

Overleveraging

While leverage can amplify returns, excessive debt increases risk. Rising interest rates or rental vacancies can quickly turn a profitable investment into a financial burden.

Underestimating Expenses

New investors often focus solely on mortgage payments.

True expenses include:

• Property taxes
• Insurance
• Maintenance
• Property management
• Vacancy allowances
• Capital expenditures (roof, HVAC, etc.)

Emotional Decision-Making

Investment properties should be evaluated based on numbers, not aesthetics. Falling in love with a property can cloud financial judgment.

Ignoring Market Cycles

Real estate markets are cyclical. Buying at peak prices without accounting for potential downturns can limit returns.

Why a Knowledgeable Real Estate Agent Is Essential

One of the most undervalued assets in real estate investing is an experienced agent. A knowledgeable agent provides:

• Local market expertise
• Access to off-market opportunities
• Skilled negotiation
• Transaction management
• Risk mitigation

Agents familiar with investment properties understand cap rates, cash flow analysis, and rental projections.

They can identify red flags that inexperienced buyers might miss.

In fast-moving markets like Phoenix, having an agent who understands pricing trends and competitive strategies can mean the difference between securing a profitable deal and overpaying.

Additionally, agents coordinate inspections, appraisals, and communication between lenders, escrow officers, and title companies—reducing stress and preventing costly errors.

Building a Professional Team

Successful investors rarely work alone. Beyond an agent, consider building relationships with:

• Mortgage brokers
• Real estate attorneys
• Certified public accountants (CPAs)
• Contractors
• Property managers

Each professional plays a role in protecting your investment and optimizing returns.

Long-Term Strategy and Exit Planning Every investment should begin with an exit strategy. Ask yourself:

• Will you hold long-term for appreciation?
• Will you refinance and pull equity?
• Will you flip within 12 months?
• Will you convert to short-term rental?

Your strategy affects financing, tax planning, renovation decisions, and property selection.

Final Thoughts

Real estate investing offers immense opportunity—but also substantial responsibility. From securing pre-approval and conducting market research to navigating inspections, disclosures, and closing procedures, each step requires careful planning.

Avoiding common pitfalls—such as overleveraging, skipping inspections, and underestimating expenses—can protect your capital and enhance profitability. Most importantly, partnering with a knowledgeable real estate agent provides guidance, negotiation strength, and local expertise that can dramatically influence your success.

Real estate is not merely about buying property; it is about making informed decisions grounded in research, strategy, and professional support. With preparation and the right team in place, it can become one of the most rewarding investments you ever make.