S&P/ASX 200 Index (INDEXASX: XJO) shares have been hammered in the worst day of trade since 2008 with even gold shares struggling. The Aussie share market shed $137 billion in value with just 3 of Australia's largest companies gaining in value yesterday.
When times are tough, investors tend to flock to defensive sectors like gold. No doubt there will be a lot of Fools mulling over a move into "safer" sectors. But are all ASX 200 gold shares created equal or is there more than meets the eye?
Why ASX 200 gold shares aren't necessarily safe
You might think that buying into ASX 200 gold shares gives you pure exposure to the safe-haven asset that is gold. However, idiosyncratic risk means you have to choose your investments carefully. For instance, the Newcrest Mining Limited (ASX: NCM) share price gained 2.54% on Monday as one of just three ASX 200 gainers. Meanwhile, there are a whole host of other gold producers that saw their share prices slump lower yesterday.
That's not to say that Newcrest is necessarily the best ASX 200 gold share on the market. Recent acquisitions have put Saracen Mineral Holdings Limited (ASX: SAR) and Northern Star Resources Ltd (ASX: NST) into the frame for the nation's leading gold miner.
Both Saracen and Northern Star shares climbed higher after they each purchased a 50% stake in the Kalgoorlie Super Pit mine. The Super Pit produced 730,000 ounces of gold while in FY18 Saracen's FY 2020 guidance was 350,000 to 370,000 ounces prior to the acquisition.
But regardless of how big the ASX 200 gold shares are, there are always risks to investing. One big environmental or safety incident at a particular miner's site could have big impacts on share prices. Similarly, any financial issues specific to one company could hit the company's shares while the underlying assets are performing well.
Foolish takeaway
It's not necessarily a bad thing to look at investing in the ASX 200 gold shares right now. Markets are turbulent and valuations are uncertain across the market. However, I wouldn't be panicking and selling up for gold mining shares just yet. I'm trusting my investing strategy and diversified holdings across geographies and sectors.
