Stocks & Bonds Plunged, Precious Metals Lost Luster, Oil Tanked

06/20/2013

Stocks & Bonds Plunged, Precious Metals Lost Luster, Oil Tanked

Courtesy of Paul Price of Market Shadows

After no changes in actual Fed policy were made yesterday, markets around the world reacted badly to the non-news.

Stocks, bonds and commodities went down in unison across the planet. Did the values of any of those assets change by 2% - 8% overnight? Nope.

Did you sell into weakness? Traders might have, but investors should welcome the chance to buy assets at better prices. There are still no good alternatives to stocks in the quest to preserve wealth. (We discussed the reasons we're not worrying in the most recent newsletter, Don't Fear the Taper.)

Market Shadows Virtual Value Portfolio is still ahead by 19.5% (+30.0% annualized) since our Oct. 26, 2012 inception date, even after today’s carnage.

We used the sell-off to put our remaining cash reserves into shares of the Vanguard FTSE Emerging Markets ETF (VWO).

Jun 20, 2013 12:00:00 AM | Education, Newsletter Articles, Value Investing

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Study History Along with Math Study History Along with Math By Paul Price of Market Shadows Albert Einstein defined insanity as doing the same thing over and over again while expecting different results. Many traders fail to learn from well-documented historical experience. Instead, they violate the Einstein rule of insanity. The chart below shows the nominal, the after-inflation, and the real (i.e., tax + inflation adjusted) total return on stocks, bonds and cash. These results cover the 86 years from January 1, 1926 to December 31, 2012. Fixed-income (bonds) registered slightly positive, but unexciting, real returns - only 0.6%. At that long-term growth rate, it...

Buying what ' everyone ' is selling Buying what 'Everyone' is Selling ... More Cash to Work By Paul Price of Market Shadows I’m going where others fear to tread today. Our Virtual Value Portfolio will use its remaining cash balance of $2,645 to purchase 70 shares of Vanguard’s Emerging Market ETF (VWO) @ $37.78 per share. The stock was down yesterday and is off another 2.8% today making for an attractive entry point. See the full details of our holdings in Market Shadows' Virtual Value Portfolio. Thoughts for today: Stocks & Bonds Plunged, Precious Metals Lost Luster, Oil Tanked.

Ilene

I'm editor at Phil's Stock World, and editor for Stock World Weekly. My background is in the biological sciences, and law. After a brief career in the legal field, I changed directions and am now working as an editor, and very much enjoying my experiences in the editing world.

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06/20/2013