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October 10, 2018 | Sell off Affords Another Opportunity to Evaluate Capital Defense

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel (www.venablepark.com) Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog: www.jugglingdynamite.com

World markets are bright red today across the board:  commodities, emerging markets, developed markets, dividend-paying companies, REITs, tech stocks, corporate bonds, cryptocurrencies, pot stocks, most currencies relative to the US dollar, you name it–it’s pretty much all getting shellacked.

The rare exceptions are US Treasuries, Canadian government bonds and the US dollar (as mentioned) which are receiving global inflows and up or little changed on the day.

Note to portfolio owners: days like this offer yet another opportunity to review our holdings.  Check how many securities, funds, and ETFs in your portfolios are selling off altogether today.  That will tell you how drown-proofed your holdings are to the coming bear market. The things that are red today will get a lot redder as this cycle completes.

What’s more, real estate values, business, and employment incomes also tend to be positively correlated with risk markets in debt-exaggerated business and market cycles like the present one.

It is not wise to have our savings plunging along with our real estate and incomes all at once.  Rainy days are coming because they are due.  It’s not too late to move more of your savings into safer more liquid deposits.   It is not about panicking; it’s about being proactive so that we can take advantage of the next clearance sale in asset markets when capital risk will finally be low and dividend yields high once more.  That is coming.

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October 10th, 2018

Posted In: Juggling Dynamite

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