The Bond Market is also flashing trouble as the yield curve is flat to inverting. The real melt will start when investors start to flee the bond market. Will negative rates be coming to NA? The 30 year Canada now yields 1.9%. Yikes!I thought we all had an understanding that the central banks just print money as needed and juice the stock index. I assumed this was a big reason everyone was investing in stocks. This thing doesn't exactly rise on its own...
Thanks for the link. The part near the end is worth thinking about:
Markets do go up and down for various reasons. You can't look back at market statistics and learn anything about effect of a future large event. The Corona virus is such an event. Hopefully it will resolve fairly quickly. But it will have an impact on the global economy. How large is still to be seen, especially seeing it is mainly China that will determine that.Watch the Bond Market
A 30 year Canadian Gov't Bond now pays 1.39% interest
A 5 year pays you 1.50%
Why would you go that far out on the yield curve when you can make more by going short. The yield curve is flattening out and inverting.
The inflation rate in Canada as of January 2020 is 2.4%
Why would you lock up money and fix it at rates below inflation? Is that safe?
Not if you're retired and seeking income. I do not seek to fix my income in retirement. I want to grow cash flow. Cash flow is king when you stop working. Nothing else matters, except for time and what is your time worth?
Warren Buffett on bonds;
“It is a terrible mistake for investors with long-term horizons - among them pension funds, college endowments and savings-minded individuals - to measure their investment 'risk' by their portfolios ratio of bonds to stocks. Often high-grade bonds in an investment portfolio increase its risk.”
It is the financial industry that wants you to have a 60/40 split of stocks and bonds. Pure unadulterated twaddle born from modern portfolio theory to sell you products.
I still see most things above their 200 day moving averages. Charts:Perfect. Most below their 200MDA. Dow down 5% from 2 weeks ago. EAFE down 6%. Sitting on loads of cash after a property sale and time to start deploying some.
I misread some general charts in the globe by accident ( had period at 3M vs 1 year) but was just looking at some ETFS mainly. CDN - FQC, EAFE - DQI and EM - ZEM all below the 200MDA.I still see most things above their 200 day moving averages. Charts:
TSX way above trendline: http://schrts.co/ctGiedbb
S&P 500 way above trendline: http://schrts.co/IKYjbVRF
MSCI EAFE has fallen to the 200 day: http://schrts.co/QcwqBsAq
The TSX and S&P 500 could fall several percent more without even breaking the pattern of the current bullish trend. I have no idea what will happen in the coming days, but this just does not seem like a serious decline at the moment.
South Korea's Kospi (KOSPI) index closed down nearly 3.9%, its worst day since October 2018, after coronavirus cases in the country surged past 800.
Italy's main index finished down 5.4%, after the number of cases there topped 200 — including five deaths — and authorities started shutting down public buildings, schools and sports events in parts of the country.
Some of the world's biggest economies are on the brink of recession
European exchanges ended the day in sharply in the red, with the United Kingdom's FTSE 100 (UKX) closing down 3.3%.
Germany's DAX (DAX) has shed 4%
French CAC 40 (CAC40) also fell nearly 4%.
The Dow has now lost more than 1,400 points in the span of the three trading days. That sharp drop wiped out the Dow’s gains for the year — leaving the index slightly negative for 2020.
Admittedly these are big single day moves. S&P 500 is down 3.3%. TSX however is doing much better. XIU is only down 1.7% which is a bad day, but not a horrendous day.James doesn't see this as a serious decline? Dow down 1000 points?????