As we prepare for our Monday morning meetings, we cast a wide net, seeking to understand what’s behind the headlines, and looking for the things that aren’t being widely covered. Often, it’s the simplest things that catch our attention like the daily chart from Apollo’s Chief Economist Thorsten Slok.

The chart shows the dramatic rise in gold prices starting in 2022 when Russia invaded Ukraine and peaking in late January of this year. What struck us was the rationale Apollo offered for the subsequent sell-off: liquidity.

Effectively Apollo is saying investors sold gold because they could.

Gold hasn’t historically been a liquid asset. Since the early 2000s, investors have been able to buy and sell gold via funds. Prior to that investors would have to acquire, store, and protect physical gold, or transact in the commodities markets. Funds, like Spider Gold Shares (GLD) offer ownership in a reserve of physical gold. Other funds offer exposure to derivative contracts that may or may not be tied to physical delivery of, or settlement in, gold. The point is, these funds offer investors a way to access a previously illiquid asset in a structure that allows them to transact with frequency and without friction.

We’ve already written about gold in portfolios. What we haven’t written about explicitly is liquidity. (Leaving aside recent allusions to the asset-liability mismatch that underlies democratizing private credit, equity, and real estate.) In our opinion, liquidity should be a critical determinant of a well-structured investment program alongside objectives, risk, return, time horizon, taxes, fees, and values. To be effective, liquidity planning should happen at multiple levels within individual portfolios – within asset classes, across investments, and at the program level. The benefit of liquidity is having levers to pull in any scenario, whether to support spending, operations, commitments, or other liabilities. Liquidity can also allow investors to go on offense, building or increasing exposure to favored investments at discounted or distressed prices. Liquidity is being sufficiently diversified that you have liquid assets you’re willing and able to sell in any environment. What’s inferred in Apollo’s rationale for the gold sell-off is that investors couldn’t find liquidity elsewhere in their portfolios.

The secret to liquidity is that it’s mostly undervalued until it isn’t.

ARCHIVE
Democratizing Private Equity – Part II, March 23, 2026
Democratizing Private Equity – Part I, March 16, 2026
Watching the Lights Turn Red, March 9, 2026
Watching the Lights Turn Green, March 2, 2026
Las Cucarachas, February 9, 2026
Gold Math, February 2, 2026
Uncorrelated, January 26, 2026
A Contrarian Trade? January 20, 2026
Woe is Me, January 12, 2026
Investing for Impact, January 5, 2026
2025

Tide Cycle Resources (Tide Cycle) is an investment advisor registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. A copy of Tide Cycle’s Forms ADV Part 2 and Form CRS are available without charge upon request. The opinions expressed are those of Tide Cycle. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Nothing contained in this document may be relied upon as a guarantee, promise, assurance, or representation as to the future. This should not be taken as specific investment advice. We recommend consulting an investment/tax professional before making financial decisions based on any information provided.

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