Wednesday, May 17, 2017
Stocks Fall, Bonds and Gold Rally Sharply
U.S. stock prices fell today by about 2% across the broad gauges of measurement; Dow Jones, S&P 500 and Nasdaq markets. That's quite a hit for just one day. However, unless you live in a cave, or under a rock - you have to know that the stock market has been performing rather well the past few years.
If all your money is in the stock market - which is not common for most folks, then your gains or losses today would be different than what the media reports on the nightly news tonight.
Before today's action, stocks were ahead 8% on the year. Today they are 2% less, so we're about +6% year-to-date.
If most folks don't own all stocks, what do they own? A normal, balanced portfolio would own some bonds, and some fixed interest investments (CD's and fixed annuities, or cash), and perhaps some contrarian - asset like silver or gold.
We own bonds and gold in all client portfolios, and like to see it offset the risks of an all-stock portfolio. It has proven itself over 40 + years.
Today, Gold rocketed up $25 an ounce - that's +2%.
And bonds; they rose also as prices rose from demand that was leaving stocks today. Interest rates fell quite a bit: The popular bond funds and ETF's gained between 1/2 percent and 1% - a huge gain on one day for a bond investment!
All said and done, if we look at a diversified portfolio, stocks fell 2%, bonds gained about 1%, Gold gained 2% and cash under the mattress is still all there. If you held all 4 of these "buckets" of money with $100,000 total, you gained $250 today !
We always advocate a balanced approach to investing; it keeps the stress lower and we can sleep well at night.
Contact me for further information on our money management and planning services. Thanks for reading!
Posted by Barry Unterbrink at 5/17/2017 06:23:00 PM
Barry Unterbrink is a fee-based Chartered Retirement Planning Counselor and wealth manager. He and his father, Larry Unterbrink, have experience as portfolio managers for institutional pension funds totaling $100 million, Investment Advisory Presidents and financial newsletter publishers. See http://www.stetsonwealthmanagement.com for more information.