Tonight, the evening news will talk about how the stock markets are ‘crashing’ — and indeed they are having problems. Apple Inc. (AAPL) — the most owned stock ever in the history of the world was down over 6.12% today.
And here’s a recap of the major stock market indices performance today:
The S&P 500 was down 3.19%
Dow Jones Industrial Average was down -2.64%
NASDAQ Composite was down – 3.77%
And here’s a chart of the the major indices for the week. It was a rough one for stock market bulls. As you can see, much of the damage came Thursday and Friday (note yesterday was a rough day as well).
As many of you are aware, I have remained overweight long-dated US Treasuries – using the 20+ Year Treasury Bond ETF (TLT) and the Vanguard Extended Duration Bond ETF (EDV). Both of these investments were up nicely yesterday and today helping offset any losses that I had in stocks. Here is a chart of the week for TLT and EDV as a comparison to the stock market indices above.
Regarding stocks, I added to my small sized positions during the downdraft as the probabilities for a recovery increase. My heavy exposure to treasury bonds helped me avoid larger losses, so I’m feeling good as I begin to hunt for value.
I don’t think the markets are in crash mode yet. And I would expect stocks (the broader market) to start to recover over the next few trading days. We’ll find out next week. I believe this (along with slowing global growth and deflation concerns) will cause the Fed to hold off on raising interest rates which should continue to support treasury bonds.
These are difficult times. Stay focused and follow your plan.
Twitter: @JeffVoudrie
The author holds positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
