- Despite Thursday’s stock market plunge, non-traditional and traditional hedges as gold and bitcoin weren’t immune from the sell-off.
- Technology stocks led a steep sell off in the market, with the Nasdaq 100 index down almost as 5.5 % in Thursday afternoon trades.
- Gold traded down as much as one %, while bitcoin fell 6 % on Thursday.
- Usually, investors seem to these non-traditional assets to offer protection during stock market sell-offs.
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Technology stocks led the market decline, with the Nasdaq hundred index down almost as 6 %. Mega-cap tech winners as Apple, Microsoft, and Amazon fell 8 %, seven %, along with six % respectively.
Meanwhile, the S&P 500 fell pretty much as four %, while the Dow Jones industrial average fell over 1,000 steps for a loss of three %.
The high technology driven sell-off in the stock market spread to traditional and non-traditional portfolio hedges as yellow and bitcoin.
Gold fell almost as one % to $US1,927.20 per ounce in Thursday trades, while bitcoin fell as much as 6 % to $US10,455.
Each of those gold and bitcoin have just recently been bid in place by investors concerned about the growing balance sheet of the US Fed and its the latest policy overhaul which will probably lead to higher levels of inflation.
Very last month, gold touched all time highs during $US2,089 an ounce, while bitcoin arrive at a multi year high of $US12,473.
Investors often look to all gold as well as bitcoin as a hedge to inflation, deflation, and falling stock prices because of their historically small correlation to equities.
But that historical correlation didn’t play out on Thursday.
A standard asset type which did offer protection to investors from Thursday’s promote sell-off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up as much as 0.20 %.
For all of the conversation with Wall Street analysts that the popular 60 40 investment portfolio which balances stocks and bonds is actually “dead,” it is alive and perfectly today.