Asset Class Moves Feb 26 2013

Stocks were up 0.61%
Bonds were up 0.04%
US Dollar was up slightly versus a basket of world currencies, and down slightly versus the Euro, after making great gains against the Euro yesterday.
Asian and European stocks were down sharply
Gold was up strong 1.7%
Oil was down -0.62%

– –

Commentary:

Bernanke told the Senators he was staying the QE course.  Had Italy’s elections been decisive yesterday, and had Bernanke said nothing today, the last two day’s of stock price movements are both within anticipated ranges.  I don’t see the “cause and effect” relationship the Finance page headlines imply between those events.

Gold

For gold investors, the last 2 days were probably comforting, reassuring.  Unfortunately, if stocks move higher in the next month, gold and silver may move sideways or down in value in the near term.  Remember, the technical chart “death cross” occurred in gold just this month, suggesting the long term owners of gold are, on the aggregate, not excited about gold in the near term.  Larger forces, and the winds blowing in stocks’ directions, may temper gold’s gains in the near term.  Nevertheless, I remain bullish on gold in the long term, and I may buy some (owning none yet) if stocks continue to go up and gold declines in value the next month.

That seems like a crazy thing for me to say:  buying an ounce of metal for over $1500 – a seemingly dangerous wager for any era or set of economic circumstances.  I cannot recommend for others to follow my lead in possibly buying gold.  I know too little.

Home Depot

Home Depot reported earnings that beat estimates.  The stock was up over 5.5% today.

GM

On Feb 14th, it was reported that Berkshire Hathaway increased their ownership in GM shares during the 4th quarter of 2014, from 15 million to 25 million shares.

I don’t recommend buying GM stock.  Also, it pays no dividend.  Having said that, Warren Buffett knows far more than me, and he thought it was more attractive, somewhere between $23 and $28/share (its price range in the fourth quarter of 2013) than many other investment options.

In the interest of full disclosure, I own some GM, because it was given to me, but I don’t like car company stocks in general.

VXX

If you don’t know what VXX is, you might look it up.  It is an ETF.  It attempts to move in line with investor’s fears.

While I don’t own any of it, it is a contrary play to consider for investors who think stocks are priced too high.  While it lost value today, it is still above its 52 week low, probably because the stock price fluctuations of the last week have understandably increased investors’ fears.

I would not recommend VXX as an investment for anyone, unless they are well informed about stocks and have time to consider stocks’ long-term price trends – on a daily basis.  Nevertheless, in this time window, VXX may be worth more consideration.

– –

Disclaimer:  These posts are not written by a professional or licensed financial advisor.  There’s nothing for sale here.  This is just a discussion forum.  No one should make any decisions based on representations made on this informal blog.  These posts are just one layperson’s opinions, concerns, and observations about asset classes – a part of larger, never-ending discussions.  Any significant financial decisions should be discussed with at least a few trusted and experienced financial advisors before acting.

Click here if you’d like to receive Twitter notices of new posts

Advertisements
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s