Gold, bitcoin neglect to protect investors from Thursday’s stock market meltdown

  • Despite Thursday’s stock market plunge, non-traditional and traditional hedges like orange and bitcoin weren’t immune from the sell-off.
  • Technological innovation stocks led a steep sell off of the industry, with the Nasdaq 100 index down almost as 5.5 % in Thursday afternoon trades.
  • Gold traded down pretty much as one %, while bitcoin fell six % on Thursday.
  • Often, investors look to these non-traditional assets to provide protection during stock market sell offs.

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Technological innovation stocks led the marketplace decline, with the Nasdaq 100 index down almost as six %. Mega-cap tech winners as Apple, Microsoft, and Amazon fell eight %, seven %, in addition to six % respectively.

Meanwhile, the S&P 500 fell as much as 4 %, while the Dow Jones industrial average fell over 1,000 aspects for a loss of three %.

The steep technology driven sell off in the stock market spread to traditional and non-traditional collection hedges as gold and bitcoin.

Gold fell as much as 1 % to $US1,927.20 per ounce in Thursday trades, while bitcoin fell pretty much as six % to $US10,455.

Each of those gold and bitcoin have just recently been bid up by investors anxious about the expanding balance sheet of the US Fed and its the latest policy overhaul that will probably result in higher levels of inflation.

Very last month, gold touched all-time highs during $US2,089 an ounce, while bitcoin reach a multi year high of $US12,473.

Investors typically look to both gold as well as bitcoin as a hedge to inflation, deflation, and dropping stock prices due to their historically low correlation to equities.

But that historical correlation didn’t play out on Thursday.

A standard asset type that did provide protection to investors from Thursday’s market sell off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up pretty much as 0.20 %.

For all of the conversation with Wall Street analysts that the popular 60 40 investment portfolio which balances stocks and bonds is actually “dead,” it’s alive and perfectly today.