- In spite of Thursday’s stock market plunge, traditional and non-traditional hedges as yellow as well as bitcoin weren’t immune from the sell-off.
- Technological innovation stocks led a steep sell-off of the sector, with the Nasdaq hundred index down as much as 5.5 % in Thursday afternoon trades.
- Gold traded down almost as one %, while bitcoin fell 6 % on Thursday.
- Usually, investors seem to these non traditional assets to provide shield during stock market sell offs.
Technology stocks led the marketplace decline, with the Nasdaq hundred index down almost as 6 %. Mega-cap tech winners like Apple, Amazon, and Microsoft fell 8 %, 7 %, and 6 % respectively.
Meanwhile, the S&P 500 fell pretty much as 4 %, while the Dow Jones industrial average fell more than 1,000 points for a loss of 3 %.
The steep technology-driven sell off in the stock market spread to traditional and non-traditional collection hedges as orange and bitcoin.
Each of those gold and bitcoin have recently been bid set up by investors worried about the growing balance sheet of the US Fed and its recent policy overhaul that will probably lead to greater levels of inflation.
Last month, gold touched all-time highs at $US2,089 an ounce, while bitcoin reach a multi year high of $US12,473.
But that historical correlation didn’t play out on Thursday.
One standard asset category which did provide protection to investors from Thursday’s advertise sell-off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up almost as 0.20 %.
For all of the talk with Wall Street analysts that the popular 60-40 investment profile which balances stocks & bonds is “dead,” it is alive and perfectly today.