Doing a portfolio check on a heavy down day | Value Investing News

Doing a portfolio check on a heavy down day

  • Typically when broad equities drop, managers will dump bonds in order to buy equities to rebalance the portfolio.
  • Today, contrary to what the market has been doing a few months ago, a selloff in equities is once again correlated to an increase in risk-free bond securities – I note that the 10-year treasury bond yield is down some 70 basis points – which means that what we are seeing in the markets today is a flight to less risky positions.
  • Canadian investors (via the TSX) have seen a 9% drop from peak-to-trough in the index high.
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