As Russia invades Ukraine, gold prices are surging. However, it may be wise to resist the urge to buy gold.

• Some investors are turning to gold due to the fear of war in Ukraine.
• The S&P 500 stock index has decreased by 13% in 2022, while gold prices have increased by over 6%.
• It may be wise for investors to refrain from selling their stocks in favor of gold due to fear.

Investors are turning to gold due to the fear of war in Ukraine, but it may be wise to exercise caution before making a hasty decision.

In times of turmoil, gold is commonly viewed as a secure investment.

During the early days of the Covid-19 pandemic, gold prices reached multiyear highs as the stock market crashed and cases of the virus spread globally. Similarly, Russia's invasion of Ukraine on Thursday caused gold prices to surge.

The SPDR Gold Shares ETF (GLD) increased by 0.68% to $179.50 at noon ET Thursday, reaching its highest point since November 2020. This represents a 6.6% rise since the beginning of the year.

As of Thursday morning, gold futures experienced a 0.7% increase, reaching a price of approximately $1,924 per ounce.

Investors should take a proactive approach during market volatility.

The escalating tensions between Russia and Ukraine have led to a market correction, with the S&P 500 falling at least 10% from its recent highs. Additionally, the Nasdaq opened in a bear market on Thursday, meaning it was down over 20% from its recent high.

As of noon ET Thursday, the stock was down 0.8%. In 2022, it has decreased by 13%.

The global market impact is mainly due to fear. If the Russian stock market were to drop to 0.000, it would not justify the overall global loss of wealth over the past few days, as stated in a client note written on Thursday by Michael McClary, chief investment officer at Valmark Financial Group in Akron, Ohio.

The short-term impact of geopolitical conflict on stocks will be negative, but the long-term outlook for investors remains positive, according to him.

Selling stocks impulsively in response to market turmoil can lead to long-term financial damage for investors.

Financial advisors suggest that investors can allocate a small portion of their portfolio to gold, but they caution against shifting a significant amount of wealth into the precious metal as a hasty decision.

Gold's usefulness as a secure investment during market fluctuations is widely debated, with some also viewing it as a hedge against inflation.

According to Charlie Fitzgerald, a certified financial planner at Moisand Fitzgerald Tamayo in Orlando, Florida, gold is predicted to earn roughly the rate of inflation over the long term, while stocks, despite their volatility, are expected to generate more wealth for investors in the long run.

On average, it takes investors four months to recover from a 10% to 20% pullback in the S&P 500, as seen since 1945. However, the duration of the current turmoil is uncertain.

The absence of significant positive swings in stocks following an initial plunge can significantly affect one's returns.

According to J.P. Morgan Asset Management, a $10,000 investment in the S&P 500 would have yielded a roughly 9.2% average annual return from December 2001 to December 2021. However, if investors sold and missed the 10 best days over that period, their return fell by almost half (to about 5%). On the other hand, those who missed the 30 best days had almost 0% return.