Last Week Didn't Really Go Anywhere - or Did It?

Might as well follow up on our last post. Did last week provide any evidence that the correction ended? Not really.

Interestingly stocks, bonds, and gold pretty much held their own, although the long bond price did drift a bit lower. Can we conclude anything? Let's give it a shot.

Re stocks, we can't really say that we've just seen a correction before a year-end rally. We'd like to, but really there's nothing solid under our feet if we stand up and shout that out for all to hear. So we'll clam up.

Re bonds, the drift down really has us thinking that - after years of warnings - the bull market in bonds that began in 1980-81 may really have ended in July 2016 - the low-point for yields, and therefore the high point for bond prices. If true, what do you do with your bond allocation? Well, if you're a buy and hold type, nothing. You keep your 30% - 40% (or whatever %) allocation and just keep re-balancing your portfolio between stocks and bond every month, quarter, year - or whatever your discipline might be. If, on the other hand, you've embraced some form of Tactical Asset Allocation, you'll be making adjustments - or maybe even selling out of bonds altogether.

Re gold, we may have spotted something a bit more intriguing. While stocks were stuck in a slump/correction and bonds were sliding slowly into what may well be a bear market, gold held its own. The thing is, gold "own" was a step up from its awfully long and miserable decline in the middle months of 2018. After showing signs of life, gold had really sucked the spirits out of its adherents. It got to be possibly the most hated asset out there in August. Then it turned around. And that turn around held last week. It may signal the end of the pain with maybe some ongoing gain. So while stocks and bonds really did nothing, gold - by doing nothing - may have done something.

Well, that's a quick summing up of last week, following on the previous week. Now it's a new week - one that's begun with most items falling in price. Oh well.

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