Today's Value of Diversification

Stock markets closed noticeably lower today, with the major USA stock averages falling near 1/2 percent to 1% each for the Dow Jones, S&P 500, and Nasdaq.

Money poured into bonds and Gold today. The 10 and 30 year Treasury obligations rose nicely as their interest rates fell. Those bond's closing rates fell about 1/8 of 1% today - that's a big move in a single day. We follow and invest in the corresponding exchange-traded funds for the Treasury market; IEF and TLT.


IEF is the 7-10 year U.S. Treasury Note, and TLT is benchmarked to the 20 year U.S. Treasury Bond.

IEF rose 1% today, while TLT rose 2% today.

Gold shot up $15 an ounce today on the commodity exchanges, good for a 1% gain.

So taken all together, a diversified portfolio of stocks (Dow Industrials), bonds (TLT), and Gold - you're very likely to have made a little money today - about 0.7%.

On the next blog, I will look at the last bear market in 2007-2009  and compare the performance of the three asset classes of stocks, bonds and Gold during that period.