FYI: We’ve been riding this bull market for so long, it feels like it could never end. And that’s a problem.
As David wrote this, we’re just coming off a pretty rough four days—relatively speaking. Over the seven days ending Oct. 10, the S&P 500 was down almost 5%. That’s not actually a huge deal in the grand scheme of things, but in recent history, it’s big. And that’s been enough to send the financial pundit-sphere into a tizzy about how to play defense when waters get rocky.
The traditional advice is diversification. Make sure you’re in something that’ll “zig” when the market “zags.” The problem is, in modern markets, short-term shocks like this one often drive all asset classes lower as investors of all types decide to sit things out.
Regards,
Ted
https://www.etf.com/publications/etfr/nadig-correlation-conundrums
